WSJ What’s News - Tsunami Waves Reach U.S. After Powerful Russia Quake

Episode Date: July 30, 2025

A.M. Edition for July 30. The magnitude 8.8 earthquake struck Russia’s Pacific coast, triggering tsunami warnings in Hawaii and California. Plus, the Federal Reserve is expected to hold rates steady, but two governors appointed by President Trump are due to vote against Fed Chair Jerome Powell, something that hasn’t happened in more than three decades. Dow Jones Newswires economics editor Paul Hannon explains the significance. And, the Trump administration takes a big swing at toppling a landmark scientific finding on greenhouse-gas emissions. Azhar Sukri hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

A powerful earthquake off Russia's coast puts Hawaii and Northern California on tsunami alert. Plus, more pressure on Powell, not one but two Fed governors could vote against the chair in today's rate setting meeting. So there are disagreements about what exactly is happening in the economy and what the Fed should do about it. Today, the majority is expected to stay on the side of, let's be cautious about the impact of tariffs, but these dissenters are likely to focus on the impact on the jobs market. And Trump scraps the landmark finding that regulates carbon emissions.

It's Wednesday, July 30th. I'm Azhar Sukri for The Wall Street Journal. Here is the AM edition of What's News, the top headlines and business stories moving your world today. Japan and parts of Northern California are under tsunami warnings after a powerful earthquake struck off the coast of Russia this morning local time, sending people fleeing to higher ground across the Pacific. The US Geological Survey measured the earthquake at magnitude 8.8, making it one of the 10 biggest on record, if confirmed. Officials in Hawaii said the initial waves reaching the state this morning weren't significant and downgraded the tsunami warning to an advisory. But Governor Josh Green urged people to remain

cautious saying it would be several hours before an all-clear signal could be given. People have to really distinguish the waves we are accustomed to on the coast every day versus a tsunami. It's a different beast altogether. That's why they have multiple measurements. It's a different beast altogether. That's why they get multiple measurements. It's even more dangerous, even more forceful. Houses will be damaged. There will be debris all over the place if we do get a full tsunami.

Near the quakes epicenter on Russia's eastern coast, a local health minister told the media that some people were hurt while running out of their homes, but no serious injuries were reported. For more on this developing story, check out wsj.com for further updates. Investors will be closely watching the Federal Reserve's interest rate decision today, with the central bank widely expected to leave its key rates unchanged. But this week's Fed meeting could see something that hasn't happened in over three decades – more than one governor voting against the chair.

Jerome Powell is already under pressure from President Trump to accelerate the pace of rate cuts. And as economics editor Paul Hannan explains, the Fed chair is facing potential opposition from two Fed members who want to cut rates. Economics editor Paul Hannan explains the Fed chair is facing potential opposition from two Fed members who want to cut rates. Investors are assuming that that is the next step and it's just a matter of time. And the dissenters will sort of reinforce that expectation. If they vote for a cut, that will increase expectations for a rate cut sometime soon.

And the thing that most policymakers are worried about is the impact of tariffs on inflation, right? They think that putting a tax on imports to the US will have some effect on consumer prices. It will push prices higher. On the other side of things, there are policymakers who are seeing signs of cooling in the jobs market,

and they think that letting that continue would be a mistake because maybe not immediately but over time that would cool inflation too much and obviously create unnecessary unemployment. One of Trump's gripes with the Fed has been how the European Central Bank has been cutting rates quicker and this morning data revealed that the US and Europe are continuing to diverge in their economic fortunes. So the eurozone economy did really well in the first three months of the year and now it's slowed quite a bit in the second quarter, although it avoided an expected contraction.

Now that is largely about what's called front running of tariffs, that is to say, US businesses stockpiling goods that they expected to be tariffed to avoid the higher costs that will result from paying those tariffs. You can kind of flip that when you're thinking about the US. So in the US, first quarter, economic output was suppressed by these imports, the stockpiling. In the second quarter, that will unwind and economists are expecting to see a return to growth at a pretty decent rate this quarter. The Fed's interest rate decision is due out at 2pm Eastern, while the Commerce Department releases the first look at GDP in the second quarter at 8.30am.

And capping off an already busy day for markets will be earnings from two of the magnificent seven, Microsoft and Meta, after the closing bell. Tech giants are continuing to make sizeable bets on artificial intelligence, with Meta CEO Mark Zuckerberg splashing multi-million dollar pay packages on top AI talent as part of an ongoing recruitment drive. Tech investor and founder of Pro-M Asset Management, Imran Khan, spoke to the WSJ's Take on the Week podcast about the massive spending required for AI.

He said companies like Google, Meta, and Amazon haven't seen a significant boost in revenues yet, and that it remains unclear whether the spending will pay off. Good things happen, but it takes time, it takes a lot of work, it takes a lot of iteration. And when this kind of platform shift happens, it's uncharted territory. In a lot of tech companies, tech companies are disrupted in traditional industries. In many ways, AI will disrupt the tech industry.

So I think it's really important that when tech industry is going to disrupt themselves first with AI, who is going to win and who is going to lose. From an investor perspective, I think you need to have a very clear open mind and you have to be very flexible and see how the data comes in and who is winning. You can hear more from that interview in the latest episode of WSJ's Take on the Week,

wherever you get your podcasts. of WSJ's Take on the Week, wherever you get your podcasts. A raft of results out this morning are dividing companies into winners and losers, with some sectors particularly vulnerable to tariffs following the first full quarter of earnings subject to President Trump's trade policies. Journal Business and Finance editor Alex Frangos is with us. Alex, no surprises here. Carmakers Porsche and Mercedes-Benz taking a real beating, it seems. Yeah, I mean, they are very exposed because they sell a lot of cars in the US and a lot of them are either made in Europe or some of them, Mercedes especially, has a big operation in the US but relies on

parts from Europe. And the tariffs have, you know, well, we now have a deal with the EU. It's had a big impact on their bottom lines. What we're seeing is a lot of these higher end car makers are absorbing the tariffs into their profit margins rather than passing them on to customers because they're afraid of losing customers and so it's a natural thing to do but that means less profit left over for shareholders. And Ford is out later. I guess we're going to get a real comparison between foreign and US car makers.

Yeah, well there's this really interesting moment we're in right now where you have tariff deals having been struck in two of the biggest car manufacturing markets, Japan and the EU, they've 15%, UK as well at 10%. But the US market, which of course can't be tariffed itself because it is the US market, but the US makers like Ford rely heavily on, especially Mexico and Canada for parts, for assembly, for final assembly, all sorts of things.

GM relies a lot on Korea actually for some of their more affordable models. So the US car makers are sitting there thinking, well, Europe's got its deal, Japan's got its deal, but we don't know what's going to go on because Canada and Mexico have still not been resolved. So we'll get an outlook from Ford, which will get a flavor of what they're seeing and how much they're being impacted. Now on the other hand we've got luxury giant Hermes seemingly handling the tariffs pretty well. Hermes is a funny company it's famous for the Birkin bag you know multi thousand dollar handbag.

Broadly the luxury industry has been hit pretty hard by slowdown in China, inability to pass on price increases in the US. It's one of its biggest markets. But Hermes has this special business model where they, Birkin bag, they hold back sales of it. They put people on these waiting lists. They have to kind of buy their way into the waiting list by becoming a loyal customer. And then when things are not great,

they can sell more Birkin bags and that helps their bottom line. So they have this incredible ability to sell their most coveted product exactly when they need it. And there's just this like pent up demand that they can tap and that's what they do. That was journal editor Alex Frankos. Thanks for joining us, Alex. Thank you. Coming up, the Trump administration moves to dismantle a bedrock climate tool that says greenhouse gases threaten public health and welfare.

Plus Americans are desperate to get their hands on a London mansion. Those stories and more after the break. The Senate confirmed Justice Department official and former Trump defence attorney Emile Beauvais to a federal appeals court yesterday. The decision clinches a lifetime judicial appointment for Beauvais over the objections of Democrats who accuse him of acting unethically and abusing his power. Beauvais has denied the accusations, saying he is not anybody's, quote, henchman. The Trump administration is taking a big swing at a landmark scientific assumption on greenhouse gas emissions.

The Environmental Protection Agency said yesterday that it wants to rescind the basis of its rules regulating the output from power plants, aircraft, cars and more, the government's so-called endangerment finding. The EPA said the 2009 declaration was quote, unduly pessimistic regarding increases in greenhouse gas emissions and global temperatures, which it said peaked in the 1930s. Data collected by the National Oceanic and Atmospheric Administration and the EPA itself contradict that claim, finding that average global atmospheric temperatures are at their highest level since record-keeping began in the 1850s.

But it hasn't all gone Trump's way. We're reporting that his administration's effort to block all funding from outside health researchers was scrapped yesterday after senior White House officials intervened. According to people familiar with the matter, millions of dollars of funding to study diabetes, cancer and more are set to flow again. The White House did not respond to requests for comment about the reversal. And finally, Americans are snapping up London mansions like never before, as sales of high-end homes in the UK plummet. US buyers, who've long been drawn to elite

neighbourhoods like Kensington and Chelsea, not where I live of course, now make up the largest demographic of overseas buyers in the capital. It comes as many wealthy foreigners are being put off real estate in the city thanks to new tax policies and a higher stamp duty, a one-time tax levied on buying a property. But as the journal's Anvi Bhutani explains, that isn't a turnoff for Americans. So Americans are taking advantage of the dip in the market for two main reasons.

One, Americans are really used to paying taxes on their income regardless of where they live. So this tax doesn't really burden them in the same way that it burdens other nationalities. And then the second is property taxes in America are so high, especially in states like New York, California. And so the one time stamp duty isn't really putting a dent in American demand. In fact, Americans are seeing the historically low prices, seeing that the

market is doing bad and they're like, this is my chance to get my hands on a mansion. And so real estate agents I've spoken to are finding that Americans are sometimes trying to buy one, two or a portfolio of investment properties and trying to get through multiple transactions very quickly in order to capitalise on this rent. And that's it for what's news this Wednesday morning. Today's show was produced by Daniel Bach and Kate Bullivant. Our supervising producer is Sandra Kilhoff. I'm Azhar Sukri for The Wall Street Journal. We'll be back tonight with a new show. Until then, thanks for listening.