It’s been less than a week since Fed Chairman Powell said the central bank remained in a wait-and-see mode for deciding if tariff-related inflation was a significant risk factor that would delay interest rate cuts. But expectations for monetary policy are moving fast these days and so assumptions from a week ago may already be ancient history.
Macro Briefing: 24 June 2025
US business activity slowed in June but continues to post modest growth, according to a survey-based estimate of GDP. The S&P Global Flash US PMI ticked down last month to 52.8 from 53.0 in May, above the neutral 50 mark that separates growth from contraction. “The June flash PMI data indicated that the US economy continued to grow at the end of the second quarter, but that the outlook remains uncertain while inflationary pressures have risen sharply in the past two months,” said the chief business economist at S&P Global Market Intelligence.
Markets Weigh Middle East Risk After US Strikes Iran
The potential for a wider Middle East war has been lurking ever since Israel first attacked Iran more than a week ago. The risk may have increased after the US strike on Iran over the weekend. But markets continue to shrug off the threat of a wider conflagration. A key factor for the path ahead could be a direct function of how or if Iran responds.
Macro Briefing: 23 June 2025
Israel and Iran continued to exchange missile attacks on Monday as Iran asks Russia for more support following the US strike on Tehran’s nuclear facilities. Meanwhile, markets are on edge as investors consider how or if Iran may respond. A key vulnerability for the world economy is the Strait of Hormuz in the Persian Gulf, a chokepoint through which roughly a third of global oil exports flow. At the moment, the price of crude oil (a proxy for risk sentiment re: Iran) is mostly steady, trading around the $77 mark for Brent. “Traders are holding their breath, waiting to see if Israel or Iran expand this conflict beyond military and political targets into traded energy,” said Bob McNally, founder of Rapidan Energy Advisers LLC and a former White House energy official. “So far, no one has pulled that trigger — and if they don’t, I can see the price reversing.”
Book Bits: 21 June 2025
● Algorithmic Harm: Protecting People in the Age of Artificial Intelligence
Oren Bar-Gill and Cass R. Sunstein
Summary via publisher (Princeton U. Press)
Will algorithms help people or hurt them? What about artificial intelligence in general? If consumers know what they need to know and do not suffer from behavioral biases, algorithms and AI are likely to be helpful. Consumers will be more likely to get what they want and need. But if consumers lack information, algorithms in particular will be able to convince them to make harmful or foolish choices. And if consumers suffer from behavioral biases, such as unrealistic optimism or a focus on the short term, algorithms will be able to produce serious harms. In Algorithmic Harm: Protecting People in the Age of Artificial Intelligence, Oren Bar-Gill and Cass Sunstein consider the harms and benefits of AI and algorithms and catalog the different ways in which algorithms are being or may be used in consumer and other markets.
Mid-Term Treasuries Lead Bond Market Rally This Year
Every corner of the US bond market has rallied year to date, led by intermediate Treasuries, based on a set of ETFs through Wednesday’s close (June 18). Several risk factors are lurking for the second half of the year, but fixed income looks set to score a win for the year when 2025 reaches the halfway mark in a few days.
Macro Briefing: 20 June 2025
President Trump said he will he would decide within two weeks whether or not the US will become directly involved in the conflict between Israel and Iran. “Based on the fact that there is a substantial chance of negotiations that may or may not take place with Iran in the near future, I will make my decision whether or not to go within the next two weeks,” Mr. Trump said in a statement read by the White House press secretary on Thursday. The price of Brent crude oil — a proxy for market sentiment regarding expectations for the Israel-Iran conflict — remains steady at the moment after running sharply higher in recent days.
Will The US Aid Israel By Attacking Iran?
The question resonates after President Trump publicly mused about what could be the most momentous decision of his presidency. Bound up with that decision are high-stakes repercussions that could reverberate through the US economy and around the world.
Macro Briefing: 19 June 2025
Israel-Iran conflict continues as Trump considers US involvement. The President said he was undecided on whether to give the order for a US strike in support of Israel’s ongoing attack on Iranian nuclear and military targets. “I may do it, I may not do it,” he told reporters at the White House on Wednesday.
Solid Rebound Still Expected For US Growth For Q2 GDP Report
Concerns about the US economy persist, but if there’s a slowdown brewing it’s unlikely to show up in the second-quarter GDP report. Revised nowcasts for the government’s Q2 report (due on July 30) continue to indicate a robust recovery following Q1’s slight contraction.