Greetings,

Shifting trade policies from the White House are creating a complex maze for companies to navigate, with variable rates based on country of origin and product type. The labyrinth of evolving compliance rules -- and changing exemptions -- is costing companies time and money. The ever-changing multilayered process requires meticulous documentation, placing an undue burden on companies, particularly smaller firms, and making it difficult to plan for the future.

Also in this edition:

• Retailers: Holiday season a lousy time to ditch the penny 🪙
• Bonds on pace for best year since 2020 💲
• Holiday party plans signal renewed focus on culture, connection 🎉
• Majority of items in CPI rise faster than 3%, economist says 💸

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The complexity of President Donald Trump's tariff regime has become a major challenge for businesses, driving up costs and complicating operations. The new system replaces a uniform tariff structure with varying rates based on the origin of goods, forcing companies to invest heavily in compliance and divert resources from innovation and growth. A KPMG survey finds that 89% of CEOs expect tariffs to significantly impact business performance, with many planning to raise prices to offset costs.

Wall Street is pouring unprecedented capital into AI infrastructure, backing multibillion-dollar data center projects for tech giants like Meta, Oracle, and Amazon. Major fund managers, private equity firms, and banks are arranging massive debt and private deals to meet the surging demand for computing power, with some single deals reaching $30 billion or more.

Dallas Fed President Lorie Logan has signaled she would oppose a rate cut in December, citing concerns about inflation remaining above the Fed's 2% target. "Until I see convincing evidence that we are headed all the way back to our 2% target, I really do think modestly restrictive policy is appropriate," Logan said at an energy conference.

US retailers are coping with operational and legal challenges following the penny's demise, as last week marked the last penny minted. Many stores have run out of pennies, forcing cash transaction rounding to the nearest nickel and stressing employees who handle change and deal with customer confusion. Trade and retail groups warn of compliance issues with minimum pricing laws and federal food subsidy rules, as rounding can result in violations. Retailers are lobbying Congress for legal clarity and protection as they enter the busy holiday season amid ongoing uncertainty.

The Bloomberg US Aggregate Bond Index is on track for its best performance since 2020, potentially fueled by Federal Reserve interest-rate cuts and other factors. The index has returned about 6.7% this year, outpacing short-term Treasury bills. However, potential threats remain, including uncertainty over future rate cuts.

Holiday party budgets are seeing a notable boost this year, with 51% of workplace decision-makers increasing their spending compared to last year and 41% holding expenses steady, according to a report from ezCater. Eighty-two percent of employees say they're planning to attend corporate holiday festivities, a year after nearly two-thirds said they had stopped attending after-work events. Budgets for holiday parties have also increased by 13% as companies view the events as crucial to fostering stronger workplace relationships and improving employee morale.

More than half of the items in the consumer price index are increasing at an annualized rate above 3%, according to Apollo's chief economist Torsten Sløk. "Looking at annualized month-over-month growth rates shows that 55% of items in the CPI basket are growing faster than 3%," said Sløk. Inflation has remained above the Federal Reserve's 2% target for nearly five years, and ongoing inflationary concerns are coming into focus as the job market weakens and there are limited signs of near-term relief.

Tariffs have highlighted a resilience gap among US middle-market firms, according to a report by PYMNTS Intelligence and HSBC. Firms with high reliance on international suppliers face regulatory uncertainty, input-cost inflation and supply delays, while those with low reliance adapt better and maintain stronger margins. The report suggests that diversification, data visibility and a culture of agility are key to managing tariff-related challenges.

The Trump administration is pivoting sharply toward affordability amid voter frustration over high living costs. Officials are rolling out measures such as targeted tariff reductions and potential direct payments to help lower prices on everyday goods. Economists note that many prices are driven by market forces beyond presidential control, and measures such as lowering tariffs might take time to affect consumer prices.

Bitcoin has erased all of its 2025 gains, falling below $93,714 as enthusiasm for former President Donald Trump's pro-cryptocurrency stance wanes and overall risk appetite declines. The cryptocurrency surged to a record $126,251 in October but began to tumble following unexpected tariff comments from Trump. Institutional support has dwindled, with exchange-traded funds experiencing outflows and corporate treasuries retreating.

CFOs should leverage AI to enhance their finance teams without becoming overly reliant on it, say Ayanna Howard of Ohio State University and Renee Richardson Gosline of MIT. "When people start to see the efficacy and early wins, they become really reliant upon it, and then the problem becomes overreliance," Gosline says. The academics recommend starting small with AI projects, consistently upskilling employees and maintaining human oversight to ensure accuracy and critical thinking.

Leadership during the age of AI will belong to those who can use the technology as a tool without losing sight of the limitations of AI, writes Naphtali Hoff, an executive coach. "The leaders who thrive long-term will be those who wield AI responsibly -- ensuring it amplifies human potential rather than erodes it," Hoff writes.

Former Federal Reserve Governor Adriana Kugler violated the central bank's ethics rules by trading individual stocks during blackout periods, prompting an internal investigation, according to documents released by the Office of Government Ethics. Kugler resigned abruptly in August, allowing President Donald Trump to appoint Stephen Miran, an adviser who has advocated for rapid interest-rate cuts.