The federal government partially shut down on Monday, Feb. 15. Congress could not come to an agreement on a funding bill for the Department of Homeland Security due to disagreements over Immigration and Customs Enforcement, which is housed within the department.

The Full Employment and Balanced Growth Act of 1978 charges the Federal Reserve with using monetary policy to achieve low inflation and a low unemployment rate. This is known as the Federal Reserve’s “dual mandate.”

The 2025 economy was a mixed bag. Economic growth was strong, but job creation weakened sharply after May. Inflation fell from post-pandemic highs but remained above its pre-pandemic trend.

The 2025 economy was a mixed bag. By several indicators, it performed well: economic growth was strong, with output increasing by about 4% in both the second and third quarters. The unemployment rate remained low throughout the year—4.4% as of September, the most recent month with available data due to the government shutdown.

Newly elected New York City Mayor Zohran Mamdani has promised to “freeze the rent” in response to the city’s high cost of housing. This is simply another term for rent control — a policy enacted in the early and mid-20th century that prevented rents from rising according to market conditions. Despite its surface-level appeal as a way to make housing more affordable, rent control does the opposite.

As of writing this column, the federal government is shut down. It is possible that the state government follows suit. The federal government typically shuts down for one of two reasons: either the debt ceiling has been reached, or the fiscal year has ended without a new budget. In this case, both the federal and potentially the state governments have shut down for the latter reason.

A 2024 poll by Navigator Research found that 57% of respondents blamed “greedy landlords who are jacking up rents” for the high cost of rent. This belief is misguided. Blaming landlords for rent is like blaming the weatherman for a heatwave. It is not possible for landlords to get together and collectively decide to “jack up rents.” Rent, like any price, is set by supply and demand. If landlords try to increase rent above the market price, a surplus of apartments will result, meaning apartments will go unrented, which will push rent back down.

With the goal of reducing America’s trade deficit, President Trump increased tariffs to rates not seen since prior to World War II. This was the stated goal behind his April 2nd “Liberation Day” when he announced these tariffs. However, economic theory suggests that tariffs will be ineffective in reducing the trade deficit.

The “Big, Beautiful Bill” that recently passed the House, Senate, and was signed into law by President Trump temporarily increases the deduction on Social Security income so that upwards of 90% of seniors will pay no income tax on Social Security benefits. This deduction is scheduled to expire in 2028 and benefits middle- and upper-income seniors the most as lower income seniors already do not pay federal income tax.

President Trump made a campaign promise that if elected, he would support legislation exempting tipped income from the federal income tax. On May 20, 2025, the Senate unanimously passed the “No Tax on Tips Act” with the House narrowly passing the “Big Beautiful Bill” on May 22 that also exempted tipped income from taxation. “No Tax on Tips” might make for a good political slogan, but it is lousy economic policy.

After peaking at nearly 45,000 points in early February, the Dow Jones Industrial Average sank to 36,645 on April 8. The Dow then staged a remarkable 3,000 point rally on April 9 following President Trump’s 90-day pause on implementing his tariffs. The Dow is at 40,000 points as of writing this column, which is about halfway between its early February high and its April 8 low. Why is the stock market reacting so strongly to tariffs?

As of this writing, President Trump has implemented record high tariffs across numerous countries. The stock market responded by dropping by 10% within two days. This has pushed the market 15% below its peak in February 2025, resulting in the loss of trillions in shareholder value.