Inflation cooled last month, but in many areas, consumers may not be feeling that relief. Plus, how does a billionaire spend his money? Documents from the Epstein files offer a rare look into one of those billionaires, Leon Black. So these documents are super interesting because it's really unusual to see in very granular detail what a billionaire's personal finances look like. And the Department of Homeland Security seems likely to shut down overnight. What could that mean for you? It's Friday, February 13th. I'm Alex Osele for The Wall Street Journal. This is a PM edition of What's News, the top headlines and business stories that move the world today. A new report out today from the Labor Department shows that annual inflation slowed more than expected in January, dropping to 2.4 percent from 2.7 percent the month before. That follows the better-than-expected January jobs report from earlier this week. These are promising numbers, but does that mean the economy is doing as well as it seems? WSJ chief economics commentator Greg Ip is here to discuss. Greg, for the past few months, there have been these fears swirling around that the Trump administration's tariffs will lead to broader inflation. Does this data ease that concern? We do see evidence of tariffs in this data. We see, for example, the price of goods, if you exclude energy and use cars, were up fairly sharply by one of their highest rates in a year or two. We see it in things like the prices of appliances, furniture, new cars. That would be consistent with tariffs being passed through. However, we do not see that tariff pressure spreading more broadly into overall inflation. Energy prices are down a fair bit, specifically gasoline. That went down a lot last month. price of housing and rent has been slowing fairly significantly. A very large supply of new apartments came along in the last few years, putting downward pressure on rents. So I think the overall picture you get here is that, yes, some continued pressure from tariffs, but overall, a relatively encouraging picture for inflation. Everyone's been talking about affordability. So for people in real life, does this feel like lower inflation? Well, the problem with the whole affordability argument is that nobody is consistent on exactly what it means. If you go and ask the average person out there, they still say an apartment costs too much to rent and a house costs too much to buy. And what they really mean is they actually want those prices going down. They don't want them just going up more slowly. So affordability is very much in the mind of the beholder. We've seen a big disconnect between what we're seeing on the inflation data, which has been consistently becoming more benign in the last year to and people's concerns about the cost of living, which remain very concerning. The 2 percent inflation number from January is still above the Fed 2 percent target But this lower inflation more jobs created as we saw from the report earlier this week is this a soft landing for the economy that the Fed had been angling for I think it's certainly going in that direction. Now, there is a technical question here, which is going to bore most of our readers to death, but I'm going to raise it anyway, because you did bring up the Federal Reserve, and so there's a lot of technical stuff involved. The inflation that the Federal Reserve targets relates to a different measure that they call the price index of personal consumption expenditures. And that inflation number has been running somewhat above the CPI number. On the other hand, today's inflation numbers suggest that if they were in the mood to cut rates, maybe it's not a crazy thing to think about. But I would also emphasize it's only one month's data. And there are reasons that we'll see some of these positive news possibly reversed in coming months. I've learned not to make too many high conviction predictions based on one month's data. Probably good advice for all of us. That was WSJ Chief Economics Commentator, Greg Ip. Thanks, Greg. Thanks for having me. Stock indexes finish little change today. The index is stabilized after yesterday's AI-driven sell-off. Markets reporter Hannah Aaron-Lang says the recent market volatility is leaving even Wall Street pros scratching their heads. The story of the past few days has really been this new set of worries about artificial intelligence. And it looks a little bit different than it has before. One really strange example of this was on Thursday, transportation stocks fell a ton off of this report from a company in Florida that said it could use AI to improve the trucking business. And it seemed like a really small report, but it caused huge waves in the transportation sector that day. So there's been these pockets of volatility in the market lately. And honestly, some of the investors that I'm talking to are a little puzzled by this. I think the question here is if these pockets of volatility represent broader reconsideration of the AI trade on Wall Street, or if this is just a continuation of the ongoing rotation we've already seen take shape. All three benchmark indexes ended the week with losses. The Nasdaq had the worst week with a 2.1 percent slide. The S&P closed down 1.4 percent, its biggest weekly loss since late November. And we're exclusively reporting that Anthropic has added a new member to its board, former Microsoft and General Motors executive Chris Liddell. Liddell helped take GM public in 2010, and having a board member with that kind of experience could be useful for Anthropic as it considers an IPO this year. Coming up, today's news from the Trump administration, including a lawsuit against Harvard. That's after the break. This morning we mentioned that the Goldman Sachs General Counsel is stepping down because of her ties to Jeffrey Epstein. And today the CEO of Dubai ports operator DP World has also resigned The Justice Department files show that Sultan Ahmed bin Saliham and Epstein exchanged friendly emails for years including discussing women in crude terms Photos show that bin Saliham visited Epstein's island. Bin Saliham couldn't be reached for comment. The Justice Department's recently released Epstein files also offer a rare look at the complex finances of one billionaire, Leon Black, the former CEO of private equity firm Apollo Global Management. Black socialized with Epstein and turned to him for tax and estate planning advice. Black stepped down as Apollo CEO in 2021 after an outside review found he paid Epstein $158 million for his services. I'm joined now by WSJ economics reporter Rachel Ensign for a deep dive into the finances of the Black family. Rachel, the documents in question here are from 2014 and 2015. So granted, Black's finances are probably a bit different now. But what kinds of details do these documents show us? So these documents are super interesting because it's really unusual to see in very granular detail what a billionaire's personal finances look like down to the line item. You can see how many bank accounts he has. He had 69 bank accounts at a few different banks. You can see that he's actually a big borrower, which is something that regular people might be surprised by. Why would a billionaire want to borrow? But especially during this period where rates were ultra low, borrowing was something really rich people did a lot. You could get a loan at like 1.5%. It was nearly free money. So even though someone might be worth $5 billion on paper, like Leon Black was, the amount that they actually have at their disposal is much less than that. And what about Black's massive art collection? Nearly $3 billion of his assets were in art and related items. He's known for having purchased Edvard Munch's The Scream at auction for nearly $120 million in 2012. And he also has Chinese bronzes that are worth $335 million. And he has nearly $500 million loan backed by his extensive art collection. The way that a mortgage is backed by your home, this art loan is backed by specific paintings that he owned. And you can see actually in the documents which paintings these were. It includes some from Degas, Cezanne, and Picasso. So this huge art loan basically allows him to turn this amazing art collection that he has into just like liquid cash. And he is going out. He's having a meal at Joe Stone Crab that costs spending over on flowers over the course of two months and also paying a lot in taxes Yeah the in there on wine and liquor that kind of stood out to me because certainly a lot more than what I'm spending. I can give you that. We should note that a spokesman for Black declined to comment for this article, and that Black had previously said he didn't engage in wrongdoing and regrets his involvement with Epstein. And that was WSJ economics reporter Rachel Ensign. Thanks, Rachel. Thank you. The Justice Department is investigating whether two immigration officers lied under oath about a shooting last month in Minneapolis. Yesterday, federal prosecutors dropped criminal charges against two men accused of attacking the officers. They said new evidence contradicted the officers' testimony. The officers have been placed on leave. It's a separate case from the shootings of Renee Good and Alex Preddy in Minneapolis last month. Federal prosecutors are investigating whether agents who shot Freddie violated his civil rights, an investigation that came after a public outcry. And as we reported yesterday, Senate Democrats blocked a bill to fund the Department of Homeland Security. That means that, barring an unlikely last-minute deal, the department will shut down after midnight. Some jobs are considered essential, so the employees will keep working. So, for example, ICE and Customs and Border Protection officials would keep working because they're considered essential law enforcement agencies. They'll also keep getting paid because of funding from last summer's One Big Beautiful Bill Act. TSA agents would also keep working, but they won't be paid. So if there's a longer shutdown and there are staffing shortages because of missed paychecks, be prepared to face longer security lines and flight delays. The Justice Department has sued Harvard University. The DOJ says Harvard isn't complying with a federal investigation into whether the school uses race as a factor when it's deciding which students to admit. The Justice Department says Harvard refused to provide some documents. Harvard says it's been responding to the government's requests for documents in good faith. The Trump administration has targeted Harvard for months with allegations of anti-Semitism and concerns about diversity practices. And that's what's news for this week. Tomorrow you can look out for our weekly markets wrap-up, What's News in Markets? Then on Sunday, we'll answer your questions about what's going on in the U.S. labor market. That's in What's New Sunday. We're off Monday for President's Day, and we'll be back with our regular show on Tuesday morning. Today's show is produced by Pierre Bien-Aimé, Anthony Bansi, and Alexis Moore with supervising producer Tali Arbel. Michael LaValle wrote our theme music. Aisha El-Muslim is our development producer. Chris Inslee is our deputy editor. And Felana Patterson is The Wall Street Journal's head of news audio. I'm Alex Osula. Thanks for listening. Thank you.
