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Full steam ahead for Donald Trump after Supreme Court ruling

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12 months ago

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AN OBSCURE patch of the constitution from 1868 never looked likely to keep Donald Trump off the presidential ballot in 2024. It was not clear that the idea of turning to Section 3 of the 14th Amendment—which bars officials who engage in “insurrection or rebellion” from holding future office—would gain traction in any of the 35 states where lawsuits emerged. But litigants had a viable claim: after taking an oath to protect the constitution, the 45th president had arguably thwarted the peaceful transfer of power on January 6th 2021 and was therefore (according to Section 3) barred from recapturing the presidency. Judges and officials in Colorado, Maine and—just last week—Illinois found this reasoning persuasive.

On March 4th, a day before Colorado and 15 other states are set to vote in primaries on Super Tuesday, the Supreme Court punctured any remaining hopes that the post-civil-war provision (originally designed to keep former Confederates at bay) would stop Mr Trump’s third run for the White House.

The justices voted unanimously to reverse the Colorado Supreme Court’s ruling that disqualified Mr Trump from the state’s primary ballot. They had given strong hints in the hearing on February 8th. Justices from right to left said that states may not unilaterally erase presidential candidates from the ballot because they are purported insurrectionists.

The decision is “per-curiam” (“by the court”) with no noted author. It proceeds on the premise that the 14th Amendment was intended primarily to restrict state autonomy—an emphasis that militates against giving states latitude to remove candidates themselves. The opinion also leans heavily on Section 5 of the amendment, which assigns to Congress the “power to enforce” the amendment’s many guarantees (from the “equal protection of the laws” to the bar on unduly depriving people of “life, liberty or property”). It is fine, the court notes, for states to disqualify candidates for state office. But “with respect to federal offices, especially the presidency”, the constitution “does not affirmatively delegate such a power to the states”.

The court writes that “state-by-state resolution” of the disqualification question “would be quite unlikely to yield a uniform answer” across the country. The “patchwork” that would result “could dramatically change the behaviour of voters, parties, and states across the country”, potentially “nullify[ing] the votes of millions and chang[ing] the election result”. The constitution cannot be read to impose such “chaos” on the country.

Although the decision was unanimous, the four female justices criticised their five male colleagues for deciding more than they needed to—and foreclosing other methods of enforcing Section 3. Justice Amy Coney Barrett wrote that the case “does not require us to address the complicated question whether federal legislation is the exclusive vehicle through which Section 3 can be enforced”. For Justices Ketanji Brown Jackson, Elena Kagan and Sonia Sotomayor, the opinion could have started and ended with the proposition that empowering Colorado to remove Mr Trump from the ballot risked “a chaotic state-by-state patchwork, at odds with our nation’s federalism principles”. In their view, the five men were excessively bold, deciding “novel constitutional questions” that rope off future challenges under Section 3.

The majority went further than necessary, the court’s three liberal justices charged, “creat[ing] a special rule for the insurrection disability in Section 3” that does not apply to any other provision of the 14th Amendment. There is “next to no support” for the proposition that Congress must pass a statute to enforce Section 3, the opinion continues. By overreaching, the court in effect “insulate[s] all alleged insurrectionists from future challenges to their holding federal office” and “shuts the door on other potential means of federal enforcement”—in a federal court, say, or via an act of Congress that is, in the eyes of a future Supreme Court majority, disproportionate or incongruent.

These disagreements mean that Trump v Anderson goes down as both a unanimous decision barring Colorado from removing Mr Trump and a 5-4 ruling giving the Supreme Court final say on congressional action disqualifying any oath-breaking insurrectionist from pursuing public office. But for the leading Republican candidate for president, the message is clear: full steam ahead. ■

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Economics

German inflation, March 2025

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14 minutes ago

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March 31, 2025

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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.

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Economics

First-quarter GDP growth will be just 0.3% as tariffs stoke stagflation conditions, says CNBC survey

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1 hour ago

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March 31, 2025

By

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.

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Economics

Tariffs to spike inflation, stunt growth and raise recession risks, Goldman says

Published

11 hours ago

on

March 30, 2025

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U.S. President Donald Trump announces that his administration has reached a deal with elite law firm Skadden, Arps, Slate, Meagher & Flom during a swearing-in ceremony in the Oval Office at the White House on March 28, 2025 in Washington, DC. 

Andrew Harnik | Getty Images

With decision day looming this week for President Donald Trump’s latest round of tariffs, Goldman Sachs expects aggressive duties from the White House to raise inflation and unemployment and drag economic growth to a near-standstill.

The investment bank now expects that tariff rates will jump 15 percentage points, its previous “risk-case” scenario that now appears more likely when Trump announces reciprocal tariffs on Wednesday. However, Goldman did note that product and country exclusions eventually will pull that increase down to 9 percentage points.

When the new trade moves are enacted, the Goldman economic team led by head of global investment research Jan Hatzius sees a broad, negative impact on the economy.

In a note published on Sunday, the firm said “we continue to believe the risk from April 2 tariffs is greater than many market participants have previously assumed.”

Inflation above goal

On inflation, the firm sees its preferred core measure, excluding food and energy prices, to hit 3.5% in 2025, a 0.5 percentage point increase from the prior forecast and well above the Federal Reserve’s 2% goal.

That in turn will come with weak economic growth: Just a 0.2% annualized growth rate in the first quarter and 1% for the full year when measured from the fourth quarter of 2024 to Q4 of 2025, down 0.5 percentage point from the prior forecast. In addition, the Wall Street firm now sees unemployment hitting 4.5%, a 0.3 percentage point raise from the previous forecast.

Taken together, Goldman now expects a 35% chance of recession in the next 12 months, up from 20% in the prior outlook.

The forecast paints a growing chance of a stagflation economy, with low growth and high inflation. The last time the U.S. saw stagflation was in the late 1970s and early ’80s. Back then, the Paul Volcker-led Fed dramatically raised interest rates, sending the economy into recession as the central bank chose fighting inflation over supporting economic growth.

Three rate cuts

Goldman’s economists do not see that being the case this time. In fact, the firm now expects the Fed to cut its benchmark rate three times this year, assuming quarter percentage point increments, up from a previous projection of two rate cuts.

“We have pulled the lone 2026 cut in our Fed forecast forward into 2025 and now expect three consecutive cuts this year in July, September, and November, which would leave our terminal rate forecast unchanged at 3.5%-3.75%,” the Goldman economists said, referring to the fed funds rate, down from 4.25% to 4.50% today.

Though the extent of the latest tariffs is still not known, the Wall Street Journal reported Sunday that Trump is pushing his team toward more aggressive levies that could mean an across-the-board hit of 20% to U.S. trading partners.

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