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Editor’s note (March 27th): Police in Maryland said that the six people who remain missing following the Key Bridge’s collapse are now presumed dead.
THE VIDEO footage of the collapse of Baltimore’s Francis Scott Key Bridge was shocking. At around 1.30am on March 26th, when a container ship rammed into one of its support columns, the central section of the 1.6-mile (2.6km) structure collapsed into the Patapsco river below, sending people and vehicles into the water. Workers repairing potholes were on the bridge at the time. “Never would you think that you would see…the Key Bridge tumble down like that,” Baltimore’s mayor, Brandon Scott, told reporters. “It looked like something out of an action movie.”
Maryland’s governor declared a state of emergency. Six people are thought to have drowned. Beyond the human toll, the immediate questions concerned the causes and consequences of the disaster—one of the most significant in America for decades, according to Jerry Hajjar, president of the Structural Engineering Institute of the American Society of Civil Engineers (ASCE). The FBI has said that terrorism was unlikely to have been behind it.
The 300-metre-long ship, the Dali, was heading from Baltimore to Colombo, in Sri Lanka, when it “lost propulsion”, according to an unclassified Cybersecurity and Infrastructure Security Agency report. The crew reportedly notified officials that a bridge collision was likely. Eyewitnesses say the ship’s lights flickered just before impact. Locals heard a loud thunder-like rumble in the middle of the night. “The house started shaking,” says Cyrus Gilbert, a resident of Locust Point, directly across the harbour.
Investigators will want to know why the Dali lost control. Nada Sanders of Northeastern University, an expert on the global supply chain, says that the ship had an inspection issue last June. According to Equasis, a shipping database, Chilean authorities gave it a “deficiency” for propulsion and auxiliary machinery (though no deficiencies were recorded in a follow-up inspection in New York).
The bridge could have been structurally sound. A report by the ASCE gave Maryland a B for its bridges and a B- for ports in 2020. “Bridges are not designed to withstand lateral loads from ships on their columns,” said Masoud Hayatdavoodi, of the University of Dundee’s School of Science and Engineering. “There is no question that the bridge would collapse due to the impact on the columns.”
President Joe Biden promises to foot the bill to get the bridge rebuilt as soon as possible. But the impact on the city is already being felt. The port is closed until further notice, causing ripples beyond the harbour. The port supports over 15,000 direct jobs, and roughly 140,000 jobs are linked to it in some way. Daraius Irani, of the Regional Economic Studies Institute at Maryland’s Towson University, says the port closure alone will probably cost roughly $50m a day in lost activity.
The harbour is an important link in America’s supply chain. More than 50 ocean carriers make nearly 1,800 annual visits. It is especially important in the automotive world. Its private and public terminals handled nearly 850,000 cars and light trucks in 2023, the most of any American port. It also ranked first in the country in handling farm and construction machinery, as well as imported sugar and gypsum, and ranks second for coal exports.
If another port experienced a hiccup (because of labour disputes, say, or cyber-attacks), the toll on the American economy could be severe. For now, though, the national impact is likely to be limited. Other ports, such as New York-New Jersey and Virginia, should be able to pick up the slack. Mark Zandi, chief economist at Moody’s, a ratings agency, says the national economy will be OK, but Baltimore will suffer. Commuters and lorry drivers will face disruption. Last year the bridge served 34,000 commercial and passenger vehicles a day, about 15% of traffic in the area.
The harbour has long been a symbol of resilience. In the war of 1812 against the British, the Americans successfully defended Fort McHenry in Baltimore Harbour, an event immortalised by Francis Scott Key in his 19th-century poem that became the national anthem. The tragedy will give the city and port time to implement upgrades that would be harder when the port is active. Baltimore may emerge with a better bridge and harbour. ■
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TO GET A sense of what the Republican Party thinks of the electoral value of Elon Musk, listen to what Brad Schimel, a conservative candidate for the Supreme Court of Wisconsin, has to say about the billionaire. At an event on March 29th at an airsoft range (a more serious version of paintball) just outside Kenosha, five speakers, including Mr Schimel, spoke for over an hour about the importance of the election to the Republican cause. Mr Musk’s political action committees (PACs) have poured over $20m into the race, far more than any other donor’s. But over the course of the event, his name came up precisely zero times.
Customers shop for fresh fruits and vegetables in a supermarket in Munich, Germany, on March 8, 2025.
Michael Nguyen | Nurphoto | Getty Images
German inflation came in at a lower-than-expected 2.3% in March, preliminary data from the country’s statistics office Destatis showed Monday.
It compares to February’s 2.6% print, which was revised lower from a preliminary reading, and a poll of Reuters economists who had been expecting inflation to come in at 2.4% The print is harmonized across the euro area for comparability.
On a monthly basis, harmonized inflation rose 0.4%. Core inflation, which excludes food and energy costs, came in at 2.5%, below February’s 2.7% reading.
Meanwhile services inflation, which had long been sticky, also eased to 3.4% in March, from 3.8% in the previous month.
The data comes at a critical time for the German economy as U.S. President Donald Trump’s tariffs loom and fiscal and economic policy shifts at home could be imminent.
Trade is a key pillar for the German economy, making it more vulnerable to the uncertainty and quickly changing developments currently dominating global trade policy. A slew of levies from the U.S. are set to come into force this week, including 25% tariffs on imported cars — a sector that is key to Germany’s economy. The country’s political leaders and car industry heavyweights have slammed Trump’s plans.
Meanwhile Germany’s political parties are working to establish a new coalition government following the results of the February 2025 federal election. Negotiations are underway between the Christian Democratic Union, alongside its sister party the Christian Social Union, and the Social Democratic Union.
While various points of contention appear to remain between the parties, their talks have already yielded some results. Earlier this month, Germany’s lawmakers voted in favor of a major fiscal package, which included amendments to long-standing debt rules to allow for higher defense spending and a 500-billion-euro ($541 billion) infrastructure fund.
This is a breaking news story, please check back for updates.
U.S. President Donald Trump speaks to members of the media aboard Air Force One before landing in West Palm Beach, Florida, U.S., March 28, 2025.
Kevin Lamarque | Reuters
Policy uncertainty and new sweeping tariffs from the Trump administration are combining to create a stagflationary outlook for the U.S. economy in the latest CNBC Rapid Update.
The Rapid Update, averaging forecasts from 14 economists for GDP and inflation, sees first quarter growth registering an anemic 0.3% compared with the 2.3% reported in the fourth quarter of 2024. It would be the weakest growth since 2022 as the economy emerged from the pandemic.
Core PCE inflation, meanwhile, the Fed’s preferred inflation indicator, will remain stuck at around 2.9% for most of the year before resuming its decline in the fourth quarter.
Behind the dour GDP forecasts is new evidence that the decline in consumer and business sentiment is showing up in real economic activity. The Commerce Department on Friday reported that real, or inflation-adjusted consumer spending in February rose just 0.1%, after a decline of -0.6% in January. Action Economics dropped its outlook for spending growth to just 0.2% in this quarter from 4% in the fourth quarter.
“Signs of slowing in hard activity data are becoming more convincing, following an earlier worsening in sentiment,” wrote Barclays over the weekend.
Another factor: a surge of imports (which subtract from GDP) that appear to have poured into the U.S. ahead of tariffs.
The good news is the import effect should abate and only two of the 12 economists surveyed see negative growth in Q1. None forecast consecutive quarters of economic contraction. Oxford Economics, which has the lowest Q1 estimate at -1.6%, expects a continued drag from imports but sees second quarter GDP rebounding to 1.9%, because those imports will eventually end up boosting growth when they are counted in inventory or sales measures.
Recession risks rising
On average, most economists forecast a gradual rebound, with second quarter GDP averaging 1.4%, third quarter at 1.6% and the final quarter of the year rising to 2%.
The danger is an economy with anemic growth of just 0.3% could easily slip into negative territory. And, with new tariffs set to come this week, not everyone is so sure about a rebound.
“While our baseline doesn’t show a decline in real GDP, given the mounting global trade war and DOGE cuts to jobs and funding, there is a good chance GDP will decline in the first and even the second quarters of this year,” said Mark Zandi of Moody’s Analytics. “And a recession will be likely if the president doesn’t begin backtracking on the tariffs by the third quarter.”
Moody’s looks for anemic Q1 growth of just 0.4% that rebounds to 1.6% by year end, which is still modestly below trend.
Stubborn inflation will complicate the Fed’s ability to respond to flagging growth. Core PCE is expected at 2.8% this quarter, rising to 3% next quarter and staying roughly at that level until in drops to 2.6% a year from now.
While the market looks to be banking on rate cuts, the Fed could find them difficult to justify until inflation begins falling more convincingly at the end of the year.