DealBook’s Lauren Hirsch is in Miami Beach at the FII Priority conference, where President Trump floated the idea of sending Americans a dividend or refund check from money saved by DOGE rather than use all of it to pay down the debt. More below.
Separately, since you may read about this elsewhere, I thought I’d share with you a secret I’ve been keeping: For the past eight years, I’ve been working on a follow-up to my book, “Too Big to Fail.” I’ve written what I think of as a prequel: a nonfiction, character-driven, behind-the-scenes account of 1929, the year of the most infamous market crash of all time. The book will be out in October. I’ll talk more about it then.
Trump floats a new stimulus idea
President Trump swept into Miami Beach on Wednesday to speak at the FII Priority conference with yet another eyebrow-raising idea: using the savings he says Elon Musk’s cost-cutting team is finding to send taxpayers checks and repay the national debt.
It isn’t clear whether this would actually happen. But Trump’s potential move — described to a crowd that included Musk; Eric Schmidt, formerly of Google; and Michael Klein, the deal-maker mogul — raises questions about the president’s economic priorities.
What Trump described: forking over 20 percent of the savings that Musk’s so-called Department of Government Efficiency initiative has cut from government spending “to American citizens” and 20 percent to paying down the national debt. (He didn’t say what would happen to the remaining 60 percent.)
What is Trump actually trying to accomplish? He has promised to cut the national debt, though critics say his plans for sweeping tax cuts and more would aggravate the nation’s fiscal burden.
But sending out such checks would effectively be a form of economic stimulus, which could raise inflation. That probably won’t sit well with the markets or with Republican lawmakers, who would have to approve such payouts in the first place.
“The best and most successful investors on earth are now racing to invest in the United States,” Trump said in his speech. He also conceded that had he lost the election, “it would have been very bad,” alluding to the legal challenges he might have had to fight.
The anticipation for Trump’s appearance ran high. V.I.P. attendees, like Schmidt, former Treasury Secretary Steven Mnuchin and the billionaire Bitcoin investor Michael Saylor waited to get into the standing-room-only event across the street from the Faena Hotel that is hosting the conference. The atmosphere among the largely male and besuited crowd felt like a revival, one attendee told DealBook.
Trump also gave shout-outs to Saudi officials in attendance, including Yasir al-Rumayyan, the governor of Saudi Arabia’s sovereign wealth fund, and Princess Reema Bandar al-Saud, the Saudi ambassador to the United States. When Trump asked them to stand for applause, many in the crowd obliged.
The warm reception for Saudi Arabia underscores Trump’s embrace of the kingdom, a far cry from when U.S. executives either bailed on the FII conference in Riyadh or went with their badges hidden after the killing of Jamal Khashoggi.
Many attendees then decamped to the Faena, including Mnuchin and Dina Powell McCormick, the former Trump official who is now vice chair of the investment firm BDT & MSD. (Also present was at least one person wearing a MAGA hat.) Over drinks in the hotel’s sprawling patio, featuring a Damien Hirst golden woolly mammoth skeleton sculpture, executives traded thoughts on the speech.
One noted that the president barely mentioned the potential tariffs that could scramble corporate America’s plans and profits. Another noted more simply, “That was a Trump speech,” before walking away.
HERE’S WHAT’S HAPPENING
Apple brings A.I. to its lower-priced iPhones. The tech giant introduced the $599 iPhone 16e on Wednesday, which will have artificial intelligence abilities that Apple hopes will reverse a yearslong iPhone sales slump. Reviewers give the new phone mixed marks.
Most Americans don’t like Elon Musk and Mark Zuckerberg, a new poll finds. The tech moguls, both of whom have embraced President Trump — and in Musk’s case, serves as his chief cost-cutter — have generally negative approval ratings, according to a Pew Research Center survey. Separately, a lawyer for X in December implied that the Interpublic Group, which is merging with Omnicom, should instruct its corporate clients to spend more on Musk’s social network, The Wall Street Journal reports.
Delta Air Lines plans to pay Toronto crash survivors $30,000. The airline made the offer to all 76 passengers aboard Delta Flight 4819 who survived the plane flipping upside down on a snowy runway this week. International treaties stipulate that airlines are to pay crash victims in certain cases, and it appears some passengers were already exploring securing compensation from Delta.
Trump’s war on congestion pricing
President Trump plans to kill the city’s new congestion pricing program, a signature municipal effort he considers “destructive to New York.”
The congestion plan, the first of its kind in the country, has stirred deep emotions across every borough and class.
But the nonprofit Partnership for New York City, a powerful advocacy group of business leaders that has supported the initiative, called the administration’s order “a terrible mistake,” DealBook’s Edmund Lee reports.
What happened: On Wednesday Trump, a native New Yorker, ordered his transportation secretary, Sean Duffy, to revoke federal approval for the plan. “CONGESTION PRICING IS DEAD,” he wrote on Truth Social. “LONG LIVE THE KING!” (It appears to be the first time he has publicly declared himself a monarch.)
The decision will very likely be challenged in court.
Since early January, cars have paid $9 to enter Manhattan below 60th Street, the most visited part of the city. The idea is to ease traffic, reduce emissions and raise money for the aging subway system. (On a recent Saturday, I drove over the Brooklyn Bridge and across Canal Street to run errands. A route that normally takes 40 minutes to an hour happened in less than 10 minutes.)
Trump and others have criticized the program as bad for commuters, many of whom drive into Manhattan for work, and altogether bad for business.
“Wrong,” Kathryn Wylde, the president of the Partnership, told DealBook in an interview. “Our studies show that congestion cost the regional economy more than $20 billion a year in lost productivity over time and wasted fuel.” She added: “That’s what convinced the business community to support it.”
The Partnership’s endorsement was a significant factor in pushing the program through. The group represents some of the biggest companies in finance, real estate and management, with an executive committee that includes Wall Street bigwigs like Jamie Dimon, Blair Effron, Jane Fraser, Henry Kravis, Larry Fink and David Solomon.
But business leaders have been careful when talking about Trump. They’ve either tiptoed around his jabs or publicly supported his proposals. On congestion pricing, they’re not saying much. “I don’t think any of them would put their name on something at this moment, while the tax bill is being negotiated,” Wylde said.
How is congestion pricing actually doing? Early studies show it’s working: Gridlock has eased in the city, where the average number of cars entering Manhattan daily dropped by 7.5 percent in the first week. The Partnership cited a poll from Morning Consult that found that 66 percent of those who paid the toll like the program, with 59 percent of voters across New York saying they want it to continue.
“This is more of a political vendetta,” Wylde said. “We think we’ll win in the courts.”
“Inflation is back”
Just in: Walmart reported record revenues last year, but said that growth in 2025 would undershoot Wall Street estimates. Shares in the retail giant, a bellwether for the economy, fell sharply in premarket trading.
It’s another data point for the economy’s health, as the Fed warns that inflation could be here for a while.
A resurgence in price rises could tie the Fed’s hands, minutes from the central bank’s January meeting suggest. Fed policymakers affirmed then that they were content to keep borrowing costs high to keep inflation under control.
That’s bound to draw the ire of President Trump, who has repeatedly demanded rate cuts, no matter what.
The Fed again zeroed in on the potentially inflationary effects of Trump’s economic agenda, this time in more emphatic terms. “In particular, participants cited the possible effects of potential changes in trade and immigration policy” on reigniting consumer prices, according to the minutes.
That has cast a bit of a chill in the markets. S&P 500 futures were in the red on Thursday, and traders are betting on no rate cuts until the central bank’s meeting in July.
Even Trump has begun to accept that inflation is a problem. “Inflation is back,” he told Sean Hannity of Fox News in an interview that aired this week. Trump blames it on former President Joe Biden, but soaring egg prices signal that the problem won’t be easy to resolve.
Rising prices may have started weighing on Trump’s approval ratings, as they did on his predecessor’s. A new Gallup poll shows that 54 percent of Americans disapprove of his handling of the economy, while 53 percent disapproved his approach to foreign trade.
Is Trump open to rethinking his tariffs plan? On Wednesday, he said on Air Force One that a new trade deal with China, a country atop his tariffs hit list, is “possible.”
Microsoft’s quantum leap
Quantum computing is currently considered the holy grail, with implications for artificial intelligence, machine learning and weather prediction. Microsoft said it has taken the next step toward making it a reality.
To achieve its latest breakthrough, Microsoft created a new state of matter. Not a solid, liquid or gas, this state was key to building a technology that is less prone to the errors that plague quantum computing, The Times’s Cade Metz writes.
Google last year unveiled an experimental quantum computer that completed calculations in five minutes that most supercomputers could not finish in 10 septillion years. Microsoft said its quantum technology is much more advanced.
Fully realized quantum computing would open a new world of opportunity and threats. “We expect the first game-changing applications of quantum computing to be in chemistry, pharmacology and materials science,” Hartmut Neven, the founder and lead of Google Quantum AI, told DealBook recently.
It also could unravel encryption, potentially making credit card transactions, traffic systems, secure communications among other things more vulnerable.
Money is pouring in. The number of investments in quantum computing startups has been steadily growing, according to PitchBook. The Chinese government has said it is investing $15.2 billion in quantum computing and the European Union has committed $7.2 billion.
Researchers have said the technology is decades away. Nvidia’s C.E.O., Jensen Huang, caused quantum stocks to sink last month when he said the technology likely wouldn’t be ready for practical use in the next 20 years.
But Microsoft argued that its latest breakthrough should shift those timelines. “We view this as something that is years away, not decades away,” Chetan Nayak, a Microsoft technical fellow who led the team that built the technology, told The Times.
THE SPEED READ
Deals
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The N.F.L.’s San Francisco 49ers are said to be weighing the sale of a 10 percent stake at a $9 billion valuation, which could make it one of the world’s most valuable sports teams. (Bloomberg)
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In airline news: JetBlue said it was in talks with “multiple airlines” about a partnership, after federal judges blocked previous efforts to strike one; and the C.E.O. of Frontier Group said he saw a “green light” for consolidation under President Trump. (CNBC, Bloomberg)
Politics, policy and regulation
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Treasury Secretary Scott Bessent will skip the Group of 20 meeting of finance ministers in South Africa next week, as the Trump administration accuses the country’s government of anti-American policies. (NYT)
Best of the rest
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Joe Rogan’s show once eschewed politics. Musk’s ascendance has changed that — to the chagrin of many of the podcast host’s fans. (Politico)
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“The Cryptocurrency Scam That Turned a Small Town Against Itself”
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