In this episode, our experts opine on the economy, considering three key indicators making a splash this week: unemployment claims are down, but so was the first quarter estimate of Gross Domestic Product (GDP), while inflation stayed stickier than hoped for in May. Meanwhile, bond yields moved higher, and the stock market is having a heyday, despite the dollar hitting a three-year low. We will be off next week for the July 4th holiday, and look forward to bringing you fresh insights the following week.
Speakers:
Brian Pietrangelo, Managing Director of Investment Strategy
George Mateyo, Chief Investment Officer
Rajeev Sharma, Managing Director of Fixed Income
Stephen Hoedt, Head of Equities
02:16 – Initial unemployment claims for the week ending June 21 came in at 236,000 – 10,000 lower than the prior week – which was a welcome sign given this figure’s recent upward trajectory.
02:43 – The final Gross Domestic Product (GDP) estimate for the first quarter of 2025 showed a 0.5% contraction, caused by an increase in imports ahead of President Trump’s insistence on widespread tariffs.
03:37 – Inflation – excluding food and energy – remained sticky in May, as the core personal consumption expenditures price index (PCE) ticked up to 0.2% month-over-month, and 2.7% year-over-year.
05:01 – Following a run of resiliency, key economic indicators appear to be following suit with the negative sentiment that has been pervasive in the first half of 2025.
09:47 – Fed Funds futures are pricing in a modest 20% chance of a rate cut in July, but expectations of the first rate cut in September appear more solid at 90% odds.
10:22 – Bond yields moved higher in reaction to the PCE inflation data, while the U.S. dollar dipped to its lowest level in three years.
11:58 – Investment grade credit spreads remain unchanged for the week and continue to trade at a very tight range.
13:39 – The stock market is enjoying all-time highs that will likely continue into next month, furthering the trend of July being the best-performing month of the year, based on historical data.
17:56 – The 90-day pause on tariffs announced in April is set to expire on July 9, though recent news suggests this is more of a soft target than a hard deadline.
Additional Resources
What Happens If the TCJA Expires? Why It Matters Now for Your Taxes and Your Legacy
Books and Podcasts for Your 2025 Summer Reading and Listening
Key Questions | Key Private Bank
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