WSJ What’s News - Walmart to Raise Prices Due to Tariffs, Setting the Tone for Other Retailers

Episode Date: May 15, 2025

P.M. Edition for May 15. The retail giant plans to raise prices this month and early this summer, when tariff-affected merchandise hits its store shelves. WSJ reporter Sarah Nassauer says its price hikes could set the tone for other U.S. retailers. And Federal Reserve Chair Jerome Powell speaks of a new strategy for the central bank, given that very low interest rates are not guaranteed. Plus, financial crime and regulation reporter Dylan Tokar follows the trail of the Chinese money-launderers depositing bags of drug cartel cash at banks around the United States. Pierre Bienaimé hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Walmart plans to raise prices because of tariffs, and other retailers will likely follow. A lot of companies imported ahead of tariffs so that stores and their suppliers are still And Fed Chair Jerome Powell speaks of a new strategy for the central bank, in a world where very low interest rates are not guaranteed. Plus, how Chinese money launderers are flooding US banks with bags of cash from drug cartels. It's Thursday, May 15th. I'm Pierre Bienemay for The Wall Street Journal, filling in for Alex Osler. This is the PM edition of What's News,

the top headlines and business stories that moved the world today. Trade war price increases are coming for American shoppers. Walmart says it will raise prices in response to tariffs. The retail giant, which counts 90% of Americans as customers, is the biggest company so far to signal price hikes because of tariffs. Sarah Nassauer writes about large retailers for the Wall Street Journal. She says Walmart's price increases stand to ripple through the retail industry and the U.S. economy.

So Walmart this morning, when it reported earnings, said that right now they're in the process of raising prices because of tariffs and that there will be more to come on their shelves. And that was a pretty significant moment because they're, you know, a huge retailer where most Americans shop at least sometimes. And they're just acknowledging that this is coming. It's significant for other retailers as well because Walmart is one of the biggest and you know, they're gonna sort of set the tone. So they're saying this that means other retailers are probably gonna have similar

approaches. The other aspect of this is that it doesn't mean that just because a product is imported that that product will become much more expensive though in some cases that will certainly happen. A retailer like Walmart is gonna look at the whole store, everything they sell, and try to manage their profits across that whole swath of goods. Federal Reserve Chair Jerome Powell said today, the central bank was in the process of making adjustments to its overarching policy setting framework.

That's to account for meaningful changes in the outlook for inflation and interest rates following the pandemic in 2020. Powell spoke at a research conference at the Fed's headquarters in Washington. The economic environment has changed significantly since 2020, and our review will reflect our assessment of those changes. Longer term interest rates are a good deal higher now,

driven largely by real rates, given the stability of longer-term inflation expectations. Many estimates of the longer-run level of the policy rate have risen, including those in the summary of economic projections. Higher real rates may also reflect the possibility that inflation could be more volatile going forward

than during the inter-crisis period of the 2010s. We may be entering a period of more frequent and potentially more persistent supply shocks, a difficult challenge for the economy and for central banks. Framework refers to how the Fed spells out its strategy for setting interest rates. The central bank adopted its current framework five years ago and began a review of it this year. Powell's remarks today indicate the Fed would retract key changes it made five years ago. US indexes closed mixed after a midday rally faded. The S&P 500 rose 0.4%, the Dow rose 0.7%, and the Nasdaq Composite fell nearly 0.2%.

The cryptocurrency exchange Coinbase said today that cybercriminals stole customer data and sought a $20 million ransom, which the company refused to pay. Coinbase said that while customer funds weren't accessed, the stolen data included personal information such as names, addresses, phone numbers, and email addresses, masked social security and bank account numbers, government ID images like driver's licenses and passports, and account data such as balance snapshots and transaction histories. Tens of thousands of users were potentially affected. According to a regulatory filing, Coinbase estimates the incident could cost them between $180 and $400 million, so as to fix the underlying issues and reimburse customers.

The company said it is working with law enforcement to investigate the incident. The breach came as Coinbase is slated to join the S&P 500 next week, a development celebrated by crypto proponents as a key step toward mainstream adoption. Coming up, how drug cartel money is laundered at U.S. banks by Chinese money launderers. That's after the outcome. But pre-diabetes does. With early diagnosis and a few healthy changes, you can stop pre-diabetes before it leads to type 2 diabetes. To learn your risk, take the one-minute test today at DoIHavePreDiabetes.org. Brought to you by the Ad Council and its pre-diabetes awareness partners.

Across Los Angeles County, Chinese money launderers in recent years have allegedly made six-figure deposits at Chase, Bank of America, and Citibank branches. The network allegedly handled some $50 million in proceeds from drug trafficking over four years. According to law enforcement officials and court records, similar operations are active in plain sight around the country, hiding the staggering revenue brought in by cross-border drug smuggling cartels. Dylan Tokar covers financial crime and regulation for the Wall Street Journal, and he joins me now.

Dylan, let's follow the money here. How does this cash get laundered by Chinese criminals? What we were looking at here was this partnership that has formed between these Chinese money brokers and transnational crime organizations like the Sinaloa Cartel. Basically, what's happening is there's this huge demand to get cash out of China, and these brokers are looking for physical currency that they can sell to their customers, and that quest for more physical currency has led them to people like the Sinaloa Cartel, which have, on their hands, a lot of cash that they are trying to get

rid of and find a way to put it into the traditional banking system. The case we dug into in this story takes place in Los Angeles County. The investigators in that case spent something like four years investigating a Chinese money broker named Shai Zhang, and they were able to show how this money is tied to drugs, specifically the Sinaloa Cartel, how Zhang sold this money to Chinese customers in the LA area, and then finally how they were also depositing a good amount of this money to Chinese customers in the LA area and then finally how they were also depositing a good amount of this money at banks. What have US banks said about their being used in this money laundering manner? We know that Zhang used three of

the biggest banks in the US. That's Chase, Bank of America, and Citibank. Those three banks told us we fulfilled our legal obligations with respect to this case or just generally. But the banks have a lot to say about the anti-money laundering system. More generally speaking, the system creates a lot of reports and a lot of those reports may not be thoroughly screened by law enforcement. More often if law enforcement use them, it's when they already have a case. So we have a system that is pretty costly for banks,

requires a lot of work on their end, but doesn't necessarily lead to specific law enforcement actions. And the Chinese money launderers in this case, in general, were taking advantage of that fact. So Sai Zhang and 23 others were charged by the U.S. Attorney's Office in Los Angeles following this investigation, and their case is ongoing. They are scheduled to go to trial in October at the moment.

Zhang has pleaded not guilty. We reached out to his lawyer multiple times, but didn't receive any response. Dylan Tokar covers financial crime and regulation for The Wall Street Journal. Dylan, thanks so much. Thank you. President Trump's bid to abolish birthright citizenship reached the Supreme Court today. Justices held a special hearing on the administration's request to set aside three federal court orders blocking implementation of his decree. Our Supreme Court correspondent, Jess Braven, joins me now. Jess, what happened

at this special hearing today? This was a very long argument scheduled on a special day. The regular argument calendar ended in April, more than two hours long. And the issue was, can federal judges issue injunctions that block a government policy across the board, across the entire country? And there have been dozens of those issued against the Trump administration. So the government came in today asking the court to say, federal judges just can't do that.

And that would mean in this case involving the specific issue, the president's executive order that essentially limits citizenship at birth, that order would go into effect in much of the country, but not all of it, because more than 20 democratic-led states would have injunctions applying to them. So that was the underlying issue, but the top line issue was really this question of injunctions. What would be the broader implications of this case? The Justice Department wanted the Supreme Court to rule that of injunctions. What would be the broader implications of this case? The Justice Department wanted the Supreme Court to rule that those injunctions are improper

and that in fact they want a ruling saying that federal judges cannot issue injunctions that apply to non-parties, to people who are not litigants in the lawsuit. And so that raises a question, what about a policy that affects thousands or hundreds of thousands or millions of people and if courts all think it's illegal, does every one of those people who is harmed by the illegal policy have to file his or her own lawsuit to enjoin it? That's sort of the question here. I mean, Justice Sonia Sotomayor tried to turn the issue inside out. What if a future president decides to confiscate all the guns in the country and people go

to court to say that's violating the Second Amendment? Does every single gun owner in the country have to file his or her own lawsuit or can a judge say, well, the Second Amendment provides a right to keep and bear arms and so we're going to block the government from enforcing their illegal order. So in other words, if the court agrees with the Trump administration, this may not be the only provision of the Constitution that gets reinterpreted by either this president or a future one.

Supreme Court correspondent, Jess Braven. And American negotiators for the first time pitched a nuclear proposal to their Iranian counterparts days before President Trump said that the U.S. was close to an agreement. That's according to people briefed on the matter. Speaking at a business event in Doha, Qatar, earlier today, Trump alluded to military strikes and said a deal would avoid that. One of the people said the Iranians said they would take the proposal back to Tehran for discussion. The U.S. wants Iran to roll back its program, which American officials think is within a few months of being able to produce a nuclear weapon. And that's what's news for this Thursday afternoon. Today's show was produced by Anthony Bansi with supervising producer Michael Kosmides.

I'm Pierre Bienemé for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.