- In today’s CEO Daily: Diane Brady reports on key takeaways from Trump’s State of the Union speech.
- The big leadership story: FedEx wants a refund.
- The markets: Up globally, with the FTSE hitting a new record on strong earnings reports.
- Plus: All the news and watercooler chat from Fortune.
Good morning. President Donald Trump delivered his State of the Union address last night to a nation that’s increasingly skeptical about his handling of the economy and core business issues. Some key takeaways for leaders from the speech, the longest on record at one hour and 47 minutes and the first to be given amid a partial government shutdown:
On the economy: The president spoke of an economy “roaring like never before,” and it is doing relatively well, growing at an inflation-adjusted 2.2% last year while unemployment is 4.3%. But many voters are pessimistic amid tepid wage growth, with consumer sentiment running 20% below where it was when Trump was sworn in. As my colleague Geoff Colvin points out, that disconnect could create a backlash. Whether the economic growth is K-shaped or E-shaped, discontent and recession signals are brewing among the bottom 80% of consumers. One nod: a proposed $1,000 401(k) match for “forgotten American workers” without such plans. That could cost around $10 billion, a modest amount relative to the roughly $4 trillion in tax cuts over the next decade from the One Big Beautiful Bill act. Those cuts are likely to shorten the lifespan of social security, Medicare and Medicaid, and won’t help a national debt that now exceeds $38.5 trillion, with debt-to-GDP ratios on track to hit 130% within the next decade.) Takeaway: There’s an economic tailwind from tax cuts and tech, but the growing deficit and cost-of-living crisis could curb growth.
On tariffs, trade and geopolitics: Trump acknowledged the “unfortunate ruling from the Supreme Court” that rendered illegal the $133 billion in tariffs he issued last year using emergency powers, but he vowed to continue on his push, leveraging other laws. No mention of refunds. (FedEx has already sued for a full refund, Costco sued before the ruling.) Never mind that the goods and services deficit significantly increased to $70.3 billion in December or that Democrats calculate tariffs have cost the average family about $1,700 over the past year. Takeaway: Continue to stress-test those supply chains, monitor geopolitics and minimize long-term risks.
On tech, talent and the state of industry: No surprises for those who have followed the trajectory of DEI, oil and gas companies or health care under this administration. Health insurers and drugmakers continue to be vilified and Trump spoke of his focus on creating more transparency through moves like TrumpRx. But he did talk about forcing tech companies to build their own power plants for their data centers to keep energy costs in check. And I detected a softer tone on some issues, from welcoming legal immigrants to cracking down on insider trading. Takeaway: The mid-terms are coming so let the games begin. Volatility is now the norm. Contact CEO Daily via Diane Brady at [email protected]
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