Speculative markets are inherently short-term focused, with notably short attention spans. President Trump is increasingly fearless. Stocks have moved on from tariff worries, while the President is determined to push his tariff policies to precarious new extremes. This predicament turned more pressing this week. Bloomberg: “Markets Embolden Trump on Tariffs, Stoking Fear of Overreach” and “Markets So Unfazed By Tariffs That It’s Making Trump Bolder.” Axios: “Wall Street May be Enabling Tariff Policy.” FT: “The Return of ‘Tariff Man’: The Week Donald Trump Revived the Global Trade War.”
In a Tuesday interview with FOX’s Larry Kudlow, leading Fed Chair candidate Kevin Warsh stated definitively: “Tariffs are not inflationary.” That’s about when Japan and South Korea received letters notifying them of the 25% tariff rates on exports to the U.S. Later that afternoon, the President announced a 50% tariff on copper imports. For good measure, he threw in an additional threat of possible 200% pharmaceutical tariffs. On Wednesday, more tariff letters: Philippines (20%), Algeria (30%), Iraq (30%), Libya (30%), Sri Lanka (30%), Brunei (25%) and Moldova (25%). “Trump Escalates Canada Trade Fight with 35% Tariff Threat.” But the big tariff letter bomb was addressed to Brasilia.
July 10 – Wall Street Journal (Gavin Bade and Marcus Walker): “President Trump’s threat for a 50% tariff on Brazilian imports expanded his use of punitive duties over matters that have nothing to do with trade, breaking with more than a half-century of global economic precedent. Trump cited the trial of the president’s close political ally, former Brazilian President Jair Bolsonaro, as the rationale for new tariffs set to take effect Aug. 1 on imports from the largest economy in Latin America. It is one of the latest—and perhaps most brazen—examples of Trump using tariffs as a cudgel for political priorities outside of trade.”
It’s a stretch to argue that a 50% tariff on imports from Brazil would put America first. Go ahead and assert tariffs aren’t inflationary, as Americans pay higher prices for Brazilian coffee, beef, orange juice, steel, iron ore, and a multitude of natural resources and other products. Brazil is our 15th largest trade partner, and a rare major economy where the U.S. runs a trade surplus. This key Latin American economy and democracy was this week pushed further into China’s orbit.
Are American consumers and businesses really going to pay for a fight to bolster Jair Bolsonaro – Brazil’s disgraced far-right former President, under indictment for money laundering and an alleged coup plot (including plans for assassinations)?
July 9 – Reuters (David Lawder, Andrea Shalal and Julia Payne): “Brad Setser, a former U.S. trade official now with the Council on Foreign Relations, said Trump’s action could easily spiral into a damaging trade war between the two democracies. ‘This shows the danger of having tariffs that are under the unilateral control of one man,’ Setser said. ‘It’s tied to the fact that Lula beat Trump’s friend Bolsonaro in the election.'”
Brazil’s President Lula da Silva responded as expected: “Brazil is a sovereign country with independent institutions, and it will not take orders from anyone.” He also stated Brazil would respond with reciprocity to any tariff increases. Making matters worse, the 50% Brazil tariff notice followed Trump’s threat of additional tariffs on BRICS nations. “Anybody that’s in BRICS is getting a 10% charge pretty soon… If they’re a member of BRICS, they’re going to have to pay a 10% tariff… and they won’t be a member long.”
July 7 – Financial Times (Michael Stott and Michael Pooler): “Leaders at the Brics summit of developing nations have lashed out at US President Donald Trump’s latest threat of an extra tariff on nations aligning with the bloc while vowing to double down on efforts to move away from the US dollar. The 11-nation group, which includes China, Russia and Iran, had already criticised Washington’s unilateral tariffs and attacks on Iran in a final statement from its Rio de Janeiro meeting… However, a social media post by Trump on Sunday night threatening a 10% extra tariff on pro-Brics countries raised tempers. Host President Luiz Inácio Lula da Silva of Brazil said it was ‘very mistaken and very irresponsible’ of Trump to ‘threaten other [countries] on social media’. ‘The world has changed. We don’t want an emperor. We are sovereign countries,’ he told a news conference…”
The Trump tariff show is risky business – and the world is increasingly exasperated. Bubbling markets, on the other hand, take it all in stride. Bloomberg: “Battle-hardened Wall Street Bulls Are Proving Very Hard to Scare.” Analysts still swallow the T.A.C.O. thing, convinced the President is all bark and no bite. Art of the deal. The President has repeatedly shown his hand, willing to retreat when markets get “yippy.”
Still, this week brought important clarity. President Trump is eager to push his tariff experiment to the limit. There will be fruitful negotiations and trade deals, but I expect average tariff rates to land at significantly higher rates than currently anticipated.
Markets had the opportunity to interject – but whiffed. At this point, overthinking the analysis is unnecessary. Speculative markets have been repeatedly rewarded for ignoring myriad risks – certainly including Trump tariffs. And so long as dismissing risk is lucrative and propagates bull market genius, then “genius” prevails. For good reason, the administration is viewed as uniquely pro-growth, pro-speculation, and pro-Bubble. As for short-termism, throwing caution to the wind, and disregarding longer-term costs, markets and the President are like-minded (codependent).
I’m reminded of an account I read years ago of a Federal Reserve official speaking privately in 1929: “How are we supposed to stop people from doing what they want to do?” So late cycle.
The S&P500 closed Thursday trading at an all-time high (6,280.46). I’d pay more attention to the bond market. Ten-year Treasury yields gained six bps this week, to a four-week high of 4.41%. Market inflation expectations – the 5-year “breakeven rate” – jumped seven bps to 2.46%, the high since April 9th (up 15bps in nine sessions). The 10-year “breakeven rate” rose to 2.39%, the high back to March 27th.
Larry Kudlow (Fox Business, July 8th): “In layman’s terms, a low money supply leads to much lower inflation and lower interest rates. The inflation rate has come down… Inflation since January, I think inflation is 1.4% at an annual rate… That’s a lot of months now, and the Fed ignored it. Powell is running a crusade against tariffs and fair trade. That is not his remit as Fed Chairman.”
Kevin Warsh: “The President and others get accused of playing politics. But let me see if we can get this straight. First, Fed leadership blamed inflation on Putin and then on the pandemic. They’ve got a new one. Now it’s the President’s fault. The inflation they said would happen in January, February, March, April didn’t happen. But I heard very recently, to the applause of international central bankers, Chairman Powell said that inflation is because of tariffs. Tariffs are not inflationary. You and I have talked about it for years… It’s a familiar blame game. It’s just not the kind of policy the central bank should be pursuing.”
Kudlow: “Jay Powell did say last year, when he was cutting rates for Biden’s reelection, he said ‘we’re data dependent.’ Now, he’s all the sudden forecast tariff dependent. It’s a whole new game. So, you sort of have to assume he’s fighting Trump is what’s going on. And then you have to assume behind him you have a couple thousand Fed economists fighting Trump. And behind them, you’ve got 11 Federal Reserve bank presidents – the regional presidents – fighting Trump. There’s something wrong with this model, and it could use a little perestroika.”
Warsh: “I think that’s right. When I was at the Fed, I talked frequently about the need for Fed reform. Then around a decade ago, I started to say what the Fed needs is regime change. Well, they’re sure proving it now. Regime change means new sets of policies. A new way of thinking about economic growth. A new understanding of what really drives inflation. It also means new personnel.”
Kudlow: “You need new personnel. You have several levels here. I want to stay with this perestroika. You can cut rates by a quarter, a half, or a full percentage point, as Mr. Trump is saying. Which is fine. But the underlying problem is a personnel problem. We know 80% of the donations – something like that – from ‘The Board’ is going to Democrats. But you have governors on balance that need new change. You’ve got the Reserve Bank presidents… and you have the economists. The board in Washington and all the system. All of that has to be changed. Personnel matters a lot.”
Warsh: “The good news is that I’ve spent five, six years there. There’s still a huge amount of talent there. But there’s also plenty of dead wood. There’re also people that need to adjust their thinking to a modern economy. This isn’t 1978 economics anymore – where we think inflation is caused by high wages. Inflation is caused by this growth of money that you talk about… If you look right now, and you could take down the balance sheet a couple trillion dollars, over time and in concert with the Treasury Secretary, that’s a big rate cut that could come. What it would do is turbo charge the real economy where things are somewhat tougher, and ultimately the financial markets would be fine. Why is it that financial conditions are so loose? The IPO markets are booming. It’s because you have all that money racing around – it’s not helping the real economy as much as an interest rate cut would.”
Kudlow: “Why not let the yield curve come down? That will make it cheaper to finance the debt in the near term. By the way, it will help finance all the tax cuts you’ve got in this big, beautiful bill.”
Warsh: “Larry, I’ll end with this. They need credibility to do it. In September they cut rates, and what happened? Long-term interest rates went up. They didn’t have that credibility.”
I’ve respected Warsh’s analysis in the past and, with a gun to my head, would favor him as Fed Chair over (reported candidates) Kevin Hassett and Secretary Bessent. But he’s spouting flawed analysis. Bond yields jumped on Fed rate cuts, not so much because of Fed credibility issues. Slash rates with financial conditions loose and markets speculative, and you’re just asking for inflating price levels. The Nasdaq100 has returned 18% since the Fed began cutting rates (9/18/24). Money Market Fund Assets have inflated $769 billion, or 15% annualized. Gold has surged 30.6%, Silver 25.1%, Platinum 40.2%, and Copper 33.0%. Bitcoin prices have almost doubled.
Warsh and Kudlow’s focus on “money supply” is a deeply flawed and archaic analytical framework. I’m all for a major revamp in Federal Reserve doctrine. But what exactly is the so-called “money supply” that the Fed will use to manage the inflation rate? The critical issue today is that the Fed is trapped by historic Credit and asset Bubbles – and markets know it. Contemporary “money” and Credit creation is dominated by institutions outside the Fed’s purview – certainly including the federal government, the leveraged speculating community, and “private Credit”.
In no way is the Fed in control of the monetary inflation process. Our central bank has for decades accommodated history’s greatest Bubbles, including unprecedented leveraged speculation. Inflate or deflate, Bubble dynamics will dictate the course of Federal Reserve policies. And the Fed’s balance sheet is the only option for stabilizing system liquidity in the event of major speculative deleveraging. Importantly, the best the Fed can muster today is to “lean against the wind” during periods of speculative excess and resulting marketplace liquidity over-abundance.
The Fed should have held off cutting rates as long as possible. The current pause is the appropriate policy course. Anyone today that conjectures “tariffs are not inflationary” should be disqualified to lead the Fed.
We’re in uncharted, tumultuous waters. No one knows how this will play out – the complex structure of myriad tariffs, their duration, trade war retaliation, supply chain dynamics, and various and potentially conflicting economic impacts. As we’ve witnessed repeatedly, central banker errors have momentous consequences. Such a responsibility demands adherence to a conservative tradition of erring on the side of caution. The confluence of the administration’s tariff policies, the big, beautiful deficit buster, and immigration crackdown beckons for a prudent Federal Reserve inflation focus. CPI, after all, has now been above the Fed’s 2% target for over four years. Uncertainties are extreme.
July 9 – Reuters (Bhargav Acharya): “U.S. President Donald Trump… called on the Federal Reserve to lower the federal benchmark interest rate by at least 3 percentage points, renewing his call for the U.S. central bank to lower rates to help reduce the cost to service the nation’s debt. ‘Our Fed Rate is AT LEAST 3 Points too high. ‘Too Late’ is costing the U.S. 360 Billion Dollars a Point, PER YEAR, in refinancing costs. No Inflation, COMPANIES POURING INTO AMERICA. ‘The hottest Country in the World!’ LOWER THE RATE!!!’ Trump wrote on Truth Social.”
The President is clearly eager to move forward with Federal Reserve “reform.”
July 10 – Associated Press (Josh Boak and Chris Megerian): “President Donald Trump is escalating his pressure campaign to get the Federal Reserve chairman to either lower interest rates or quit his post by targeting the expensive renovation at the central bank’s headquarters. The latest step came… when Russ Vought, Trump’s top budget adviser, sent a letter to Federal Reserve Chairman Jerome Powell saying the president is ‘extremely troubled’ that plans may have violated government building rules with an ‘ostentatious overhaul.’ Trump also named two close aides to an obscure commission who plan to review the Federal Reserve building plans — another avenue to increase scrutiny on Powell… This follows a near-daily drumbeat of criticism that Trump has leveled at Powell, whom he has disparaged as ‘a very stupid person’ who should ‘resign immediately.’ It’s an unprecedented attempt to reshape the Federal Reserve’s traditional role as an autonomous arbiter of U.S. monetary policy.”
July 9 – Axios (Hans Nichols): “Sen. Bernie Moreno is recruiting more GOP senators for his pressure campaign to force Federal Reserve Chair Jerome Powell to resign. Powell has resisted calls from President Trump to leave his post early, enduring mockery and meanness from the very president who appointed him in 2017. Moreno (R-Ohio) wants to broaden the case against Powell and amp up the pressure to persuade the Fed to lower interest rates more quickly. A member of the Senate Banking Committee, Moreno is also setting the stage for the confirmation process for the next Fed chair. Powell’s chairmanship ends in May 2026. So far, Moreno and Sens. Tommy Tuberville (R-Ala.) and Rick Scott (R-Fla.) are the only senators to have called on Powell to resign… ‘Your choice not to lower interest rates despite the Trump Administration’s economic progress is costing our country $400 billion per year,’ Moreno wrote to Powell… ‘You should resign immediately and allow the President the deference to select someone he feels can make the changes needed to restore the credibility of the Federal Reserve System.’”
In a Friday afternoon Bloomberg interview, senior White House advisor Peter Navarro said the bond market views Chair Powell as “a clown.” I guess we’ll find out soon enough. Is the administration moving to use the Federal Reserve renovation project and Powell’s testimony on the subject as grounds for dismissal? Will Congressional Republicans bend to the pressure of the President to investigate Powell? Slimy.
It was only one week, but global bond markets seemed a little uncomfortable with The Return of Tariff Man. German bund yields surged 12 bps (2.73%) and French yields 14 bps (3.42%) – both to highs since the end of Q1. Italian yields rose 13 bps (3.57%) and Greek yields 11 bps (3.39%) – to two-month highs. UK gilt yields rose seven bps to 4.62%. Japanese 10-year JGB yields jumped nine bps to 1.52% – within a few bps of highs back to 2008. On the back of a strong jobs report, Canadian 10-year yields surged 15 bps to 3.50%, the high since the mid-January yield spike. Australian yields jumped 13 bps this week to 4.33%.
Treasuries and global bonds appear vulnerable. They won’t, though the administration should tread carefully with all the pressure to lower rates and the vile assault on Powell. Attacks on the institution of the Federal Reserve have unappreciated costs. I expect international investors, in particular, to have major concerns with a Trump administration Federal Reserve “reform” effort. Drawing the Fed into the political muck is a mistake. How the leveraged speculating community reacts to an assault on Fed independence is a big wild card. I’ve had the view that extraordinary uncertainty is not conducive to speculative leverage. I’m not ready to throw in the towel on this analysis.
The ECB has slashed rates 100 bps so far this year (to 2.15%), yet German yields have jumped 36 bps y-t-d. The Bank of England policy rate was reduced 50 bps (4.25%), though gilt yields are up five bps. The Bank of Canada has cut 50 bps (2.75%), and 10-year yields rose 28 bps. The Reserve Bank of Australia has reduced rates 50 bps (3.85%), with 10-year yields down only four bps. Japanese yields have surged 42 bps so far in 2025, after a 25 bps increase in the policy rate.
Global bond markets are signaling a new paradigm of market yields increasingly disconnected from central bank policy rates. Loose monetary policies are no longer automatically transmitted to lower bond yields. This is easily explained by surging bond issuance, mounting debt levels, and now structurally elevated inflation risk. A case can be made that global bond markets have grown leery of loose, inflation-stoking policies. The Trump administration would be well-advised to back off its attacks on Powell and monetary policy, focusing instead on sound fiscal and trade policies.
For Posterity:
July 11 – CNN (Brian Stelter and Jamie Gangel): “David Gergen, who served as a presidential adviser to four presidents of both parties and educated generations of Americans about leadership and civic engagement, has died. He was 83. Gergen was the founding director of the Center for Public Leadership at the Harvard Kennedy School and a longtime political analyst for CNN… Gergen was a legendary figure in Washington and beyond who brought insider knowledge and used his media platforms to promote responsible leadership. A CNN spokesperson said he was ‘always happy to share his wisdom and his spotlight with others.’ ‘A political scholar who served four presidents of both parties, an adoring father and dedicated husband, a senior statesman in every sense of the word, and a tireless educator. But above all else, David was a relentlessly kind and warm person,’ the spokesperson said, adding that ‘our staff, contributors, and audiences are better informed because of his towering influence.’”
For the Week:
The S&P500 slipped 0.3% (up 6.4% y-t-d), and the Dow declined 1.0% (up 4.3%). The Utilities gained 1.1% (up 9.5%). The Banks fell 1.4% (up 12.5%), and the Broker/Dealers dipped 1.0% (up 24.4%). The Transports advanced 1.0% (up 2.0%). The S&P 400 Midcaps dipped 0.6% (up 1.6%), and the small cap Russell 2000 declined 1.6% (up 0.2%). The Nasdaq100 slipped 0.4% (up 8.4%). The Semiconductors increased 0.9% (up 14.4%). The Biotechs gained 1.2% (up 0.5%). With bullion up another $18, the HUI gold index added 0.8% (up 56.2%).
Three-month Treasury bill rates ended the week at 4.2275%. Two-year government yields added a basis point to 3.89% (down 36bps y-t-d). Five-year T-note yields increased four bps to 3.97% (down 41bps). Ten-year Treasury yields gained six bps to 4.41% (down 16bps). Long bond yields jumped nine bps to 4.95% (up 17bps). Benchmark Fannie Mae MBS yields rose eight bps to 5.65% (down 19bps).
Italian 10-year yields jumped 13 bps to 3.57% (up 5bps y-t-d). Greek 10-year yields rose 11 bps to 3.39% (up 18bps). Spain’s 10-year yields gained 11 bps to 3.33% (up 27bps). German bund yields jumped 12 bps to 2.73% (up 36bps). French yields surged 14 bps to 3.42% (up 22bps). The French to German 10-year bond spread widened two to 69 bps. U.K. 10-year gilt yields gained seven bps to 4.62% (up 5bps). U.K.’s FTSE equities index added 1.3% (up 9.4% y-t-d).
Japan’s Nikkei 225 Equities Index slipped 0.6% (down 0.8% y-t-d). Japanese 10-year “JGB” yields jumped nine bps to 1.52% (up 42bps y-t-d). France’s CAC40 advanced 1.7% (up 6.1%). The German DAX equities index rose 2.0% (up 21.8%). Spain’s IBEX 35 equities index added 0.3% (up 20.8%). Italy’s FTSE MIB index gained 1.2% (up 17.2%). EM equities were mixed. Brazil’s Bovespa index sank 3.6% (up 13.2%), and Mexico’s Bolsa index fell 2.0% (up 14.3%). South Korea’s Kospi jumped 4.0% (up 32.4%). India’s Sensex equities index declined 1.1% (up 5.1%). China’s Shanghai Exchange Index rose 1.1% (up 4.7%). Turkey’s Borsa Istanbul National 100 index increased 0.8% (up 5.4%).
Federal Reserve Credit declined $1.5 billion last week to $6.614 TN. Fed Credit was down $2.276 TN from the June 22, 2022, peak. Over the past 304 weeks, Fed Credit expanded $2.887 TN, or 77%. Fed Credit inflated $3.803 TN, or 135%, over the past 661 weeks. Elsewhere, Fed holdings for foreign owners of Treasury, Agency Debt gained $6.2 billion last week to $3.238 TN. “Custody holdings” were down $74 billion y-o-y, or 2.2%.
Total money market fund assets slipped $6 billion to $7.072 TN. Money funds were up $969 billion, or 15.9%, y-o-y.
Total Commercial Paper declined $13.7 billion to $1.425 TN. CP has expanded $337 billion y-t-d and $136 billion, or 10.5%, y-o-y.
Freddie Mac 30-year fixed mortgage rates increased five bps to 6.72% (down 17bps y-o-y). Fifteen-year rates rose six bps to 5.86% (down 31bps). Bankrate’s survey of jumbo mortgage borrowing costs had 30-year fixed rates down a basis point to 6.86% (down 39bps).
Currency Watch:
July 8 – Wall Street Journal (Paul Hannon): “Investors are seeking more protection against the risk that the U.S. dollar will weaken during future periods of stress in the global economy… the Bank of England said… In its twice-yearly report on the stability of the financial system, the BOE warned that the risk of sharp falls in prices of risky assets remains high after the rebound that followed President Trump’s decision to pause big raises in tariffs, which had sent markets tumbling. The BOE said that while the financial system showed resilience during the period of volatility that followed the April 2 announcement of big tariff increases, the episode provided further evidence of a break in an historical pattern that saw the U.S. dollar strengthen at times of stress.”
For the week, the U.S. Dollar Index recovered 0.7% to 97.853 (down 9.8% y-t-d). For the week on the upside, the Australian dollar increased 0.3%. On the downside, the Brazilian real declined 2.5%, the South African rand 2.0%, the Japanese yen 2.0%, the British pound 1.2%, the South Korean won 1.0%, the New Zealand dollar 0.9%, the euro 0.8%, the Canadian dollar 0.7%, the Singapore dollar 0.5%, the Norwegian krone 0.5%, the Swiss franc 0.3%, and the Mexican peso 0.1%. The Chinese (onshore) renminbi slipped 0.06% versus the dollar (up 1.80% y-t-d).
Commodities Watch:
July 11 – Bloomberg (Jack Ryan): “Silver jumped to its highest level since 2011, as US premiums rise and the spot London market shows signs of tightness. Silver rose 1.6% to $37.59 an ounce, the most since September 2011. US silver futures climbed even higher, with September contracts hitting $38.46 an ounce.”
July 7 – Bloomberg (Sybilla Gross): “China added to its official gold reserves for an eighth straight month in June, as prices of the precious metal traded near a record high. Bullion held by the People’s Bank of China rose by 70,000 troy ounces last month… Its gold reserves have climbed by 1.1 million troy ounces — or about 34.2 tons — since the current run of purchases began in November last year.”
The Bloomberg Commodities Index added 0.4% (up 5.1% y-t-d). Spot Gold gained 0.6% to $3,356 (up 27.9%). Silver surged 3.9% to $38.4154 (up 32.9%). WTI crude gained $1.45, or 2.2%, to $68.45 (down 5%). Gasoline jumped 3.2% (up 8%), while Natural Gas fell 2.2% to $3.314 (down 8%). Copper surged 10.7% (up 39%). Wheat fell 1.3% (down 2%), and Corn sank 6.6% (down 12%). Bitcoin jumped $9,450, or 8.7%, to $117,550 (up 25.4%).
Market Instability Watch:
July 8 – Bloomberg (Tom Rees and Irina Anghel): “Britain is at risk of a £22 billion ($29.9bn) surge in debt-interest costs as pension schemes buy fewer government bonds, threatening to worsen an ‘unsustainable’ outlook for the public finances. That’s according to the UK fiscal watchdog, which warned of a rapidly rising debt burden as an ageing population drives up spending on health care and pensions, while climate and geopolitical risks mount.”
July 9 – Bloomberg (Masahiro Hidaka): “Liquidity in the Japanese government bond market has deteriorated to the worst level in decades, increasing the risk of sharp spikes in yields. A Bloomberg gauge that examines how far intraday yield levels deviate from fair value has surged since early April and is now well above the previous peak set during the global financial crisis in 2008. Yields on 30- and 40-year government bond surged in May to their highest levels since inception after a 20-year debt sale drew the weakest demand in more than a decade.”
July 7 – Bloomberg (Claire Ruckin, Abhinav Ramnarayan, and Rachel Graf): “A pre-summer frenzy in junk loans is seeing the market start to overheat, prompting investors to get a bit more picky about deals after spreads reached the tightest levels in years. A rush of issuance — driven by private equity firms seeking to improve the capital structures of portfolio companies — had been met with high demand from M&A-starved investors, enabling borrowers to squeeze their interest margins by as much as 75 bps on some offerings. But some investors are now feeling the strain. Managers of collateralized loan obligations — the biggest buyers of leveraged loans — are particularly struggling to make the numbers work. ‘There is only so far pricing can move before it fails to make sense from an investor perspective,’ said Sabrina Fox of Fox Legal Training, a leveraged-finance expert.”
July 10 – Bloomberg (Irina Anghel and Tom Rees): “Bank of England Deputy Governor Sarah Breeden said some asset prices are already starting to reflect growing climate risks, warning that extreme shocks could speed up that process. Breeden, who oversees financial stability for the central bank, pointed to sovereign and corporate bond prices as evidence of such assets… However, current prices don’t fully account for risks emerging from net zero transition efforts or, in their absence from extreme weather events, she added. ‘Rapid repricing could occur if markets start pricing in severe physical climate risks or a disorderly transition, perhaps following acute physical disasters,’ Breeden said.”
July 6 – Bloomberg (Jorgelina do Rosario and Vinícius Andrade): “US policy volatility has sent money managers scouring the world for alternatives, propelling local bonds from emerging-market countries to their best first half in 16 years. The surge in demand for fixed-income assets in EM currencies is largely the flip side of sinking confidence in the US dollar, which has tumbled almost 11% this year… That’s the greenback’s worst performance since the 1970s, and the losses are across the board, with it falling against 19 of the 23 most-traded emerging-market currencies, and by at least 10% against 10 of them.”
Global Credit and Financial Bubble Watch:
July 10 – Bloomberg (Olivia Fishlow and Ellen Schneider): “Finding steep competition from the broadly syndicated market, private credit firms are offering one benefit to potential borrowers: leverage. Direct lenders are pitching higher leverage ratios as a sweetener for deals, particularly for companies owned by private equity firms. Tacking on more debt gives companies flexibility to make acquisitions, and can fund a dividend payout to shareholders, also known as a dividend recapitalization. ‘We are seeing fierce competition for the highest quality assets, and with that, the illiquidity premium is shrinking,’ said Matt Harvey, the head of direct lending at PGIM Private Capital. ‘Leverage is also stretching, in addition to terms, but we aren’t observing a blatant abuse of credit underwriting standards.’”
July 9 – Bloomberg (Scott Carpenter): “Reckoner Capital Management is testing investors’ hunger for a new category of risky bets with an exchange-traded fund that uses leverage to juice returns on collateralized loan obligations. The Reckoner Leveraged AAA CLO ETF is the first such fund to invest in a variety of top-rated CLO bonds while leveraging up to 50% of that exposure… The ETF arrives amid strong demand for collateralized loan obligations, which bundle buyout debt into bonds. Retail investors are also embracing leveraged investment strategies, once considered the province of investment professionals…”
July 7 – Financial Times (Sujeet Indap and Joe Miller): “Private credit lenders have found a new batch of clients: US government contractors short-changed by Elon Musk’s cost-cutting drive and trying to stay afloat. Legalist, a private capital lender based in San Francisco, told the Financial Times that its ‘government receivables’ business had extended more than $100mn in financing to dozens of contractors since the start of 2025, more than doubling the strategy’s previous total book of business. The group is looking to raise $250mn from investors to extend more similar loans.”
Trump Administration Watch:
July 5 – Wall Street Journal (Greg Ip): “There is a potential spoiler to the growth dividend President Trump is counting on from the tax cuts that Congress just passed. Those tax cuts will be financed by unprecedented borrowing. Textbook economics predicts that borrowing will push interest rates higher, neutralizing the benefits of lower tax rates. Trump has an answer for that: break the link between budget deficits and rates. In recent weeks, he has intensified his demands that Federal Reserve Chair Jerome Powell cut rates, or step aside for someone who will. Trump has always been, as he puts it, a ‘low interest rate person.’ But his latest demands add a critical new dimension—he wants lower rates to meet his fiscal priorities.”
July 9 – Axios (Ben Berkowitz and Courtenay Brown): “President Trump… launched a multi-front trade assault on Brazil, threatening it with massive new tariffs and demanding the end of criminal charges against a personal ally. Trump’s tariff letter to Brazil is far more aggressive, with a much higher levy, than any other trade missive he’s sent this week. It threatens $42 billion in annual U.S. imports, everything from steel to coffee, and the potential collapse of a trading relationship with one of the few countries where the U.S. runs a trade surplus. Trump opened his letter to Brazilian President Luiz Inácio Lula da Silva with an explicit demand to end the trial of former president Jair Bolsonaro, an ally facing charges for allegedly plotting a coup. ‘This Trial should not be taking place. It is a Witch Hunt that should end IMMEDIATELY!’ Trump wrote… The letter goes on to insist Brazil has treated U.S. social media companies unfairly, accusing the government of censoring free speech and threatening a 50% levy on Brazilian imports.”
July 9 – Wall Street Journal (Samantha Pearson): “Relations between the U.S. and Brazil descended into crisis after President Trump sought to halt criminal proceedings against his right-wing ally in the country, former leader Jair Bolsonaro, by imposing steep tariffs on Latin America’s biggest nation. The U.S. will charge a 50% tariff on Brazilian goods starting Aug. 1, Trump told Brazilian President Luiz Inácio Lula da Silva…, citing legal action against Bolsonaro as part of his reasoning. Bolsonaro, a former army captain turned conservative icon, is on trial in Brazil after police accused him of plotting a coup in 2022 and conspiring to kill da Silva by poisoning him… ‘Brazil is a sovereign country with independent institutions, and it will not take orders from anyone,’ da Silva wrote… when he called an emergency cabinet meeting to discuss Trump’s announcement. He said the Brazilian government would respond with reciprocity, without giving further details.”
July 8 – Wall Street Journal (Brian Schwartz and Gavin Bade): “President Trump decided to delay the implementation of his so-called reciprocal tariffs to Aug. 1 after advisers including Treasury Secretary Scott Bessent told him he could get trade deals with more time… Administration officials including Bessent felt as if they were making progress on deals with several trading partners such as India and the European Union as Trump’s previous deadline approached, the people said.”
July 8 – Wall Street Journal (Brian Schwartz and Nick Timiraos): “Two Republicans named Kevin are vying to be the next chairman of the Federal Reserve. One is rising to the top of the list of potential candidates, while the other is facing skepticism from President Trump’s allies. Kevin Hassett, one of Trump’s closest economic advisers, is emerging as a serious contender to be the next Fed chair, according to people familiar… Hassett’s rise threatens the other Kevin—former Fed governor Kevin Warsh—an early favorite for the job who has angled for the position ever since Trump passed him over for it eight years ago. Some people close to the president worry that Warsh, who isn’t in Trump’s inner circle, won’t be a champion of lower rates. What is unfolding is quintessential Trump: two ambitious men competing for his approval in a high-stakes contest that echoes the boardroom drama he once promoted on ‘The Apprentice.’”
July 8 – Wall Street Journal (Megumi Fujikawa): “President Trump said… the U.S. would resume providing Ukraine with arms to help it withstand Russian attacks after months of trying without success to draw Moscow into negotiations on ending the war. ‘We have to, they have to be able to defend themselves,’ Trump said… ‘They are getting hit very hard. Now they are getting hit very hard. We’re gonna have to send more weapons.’ His comments were the strongest indication so far that Trump has come around to the idea of strengthening Kyiv’s defenses less than a week after it was disclosed that the Pentagon was withholding a shipment of arms earmarked for Ukraine.”
July 7 – Bloomberg (Myles Miller): “Tom Homan, the border czar for President Donald Trump, said that immigration agents will ramp up arrests in New York City as part of a broader crackdown on sanctuary jurisdictions that limit cooperation with federal authorities. ‘We’re going to be in New York City,’ Homan told reporters… ‘President Trump said it two weeks ago — we’re going to double down and triple down on sanctuary cities. Why? Not because it’s a blue city or a blue state, but because we know that’s where the problem is.’ His remarks came just days after New York City mayoral frontrunner Zohran Mamdani, a state assemblyman from Queens, vowed to sever all ties between city agencies and ICE if elected in November.”
July 7 – Associated Press (Tara Copp, Christopher Weber and Damian Dovarganes): “Federal officers and National Guard troops fanned out around a mostly empty Los Angeles park in a largely immigrant neighborhood on foot, horseback and military vehicles on Monday for about an hour before abruptly leaving, an operation that local officials said seemed designed to sow fear. The Department of Homeland Security wouldn’t say whether anyone had been arrested during the brief operation at MacArthur Park. Federal officials did not respond to requests for comment about why the park was targeted or why the raid ended abruptly.”
July 9 – Financial Times (Steff Chávez and Christopher Grimes): “Ahisary moved from her home in Mexico in 1993 to South Central Los Angeles, where she worked multiple jobs and raised three children. In all her years in LA as an undocumented migrant, she has never experienced anything like the fear of the past few weeks. Masked officers from the country’s Immigration and Customs Enforcement agency (ICE) have descended on the city, rounding up undocumented migrants like her in parks, workplaces, retail store parking lots and courthouses. ‘People are afraid that it’s not safe to go out,’ Ahisary… said… ‘It’s unfortunate because people have to go to work. If they don’t go to work, how are they going to pay their bills?’”
China Trade War Watch:
July 4 – Wall Street Journal (Lingling Wei): “In the U.S.-China conflict, President Trump is waging an economic assault. But Chinese leader Xi Jinping is fighting a Cold War. Xi is entering trade negotiations with a grand strategy he has prepared for years… Well aware of the U.S.’s continued economic and military superiority, the advisers say, Xi is seeking to avoid direct confrontation, while holding China’s ground in a protracted, all-encompassing competition. Xi aims to achieve what Mao Zedong used to call a ‘strategic stalemate’—an enduring equilibrium where American pressure becomes manageable and China buys time to catch up to the U.S. ‘For China, ‘strategic stalemate’ is the most realistic and preferred outcome in the foreseeable future,’ said Minxin Pei, a Claremont McKenna College professor and editor of the quarterly journal China Leadership Monitor. ‘Strategic patience, conservation of resources and tactical flexibility will all be critical in achieving this stalemate.’”
July 8 – Financial Times (Chris Miller): “Shortly after Beijing announced new restrictions on exporting rare earth minerals and the specialised magnets they make, the world’s auto industry warned of shortages that could force factory closures. China’s skillful deployment of rare earth sanctions this spring was probably the key factor in forcing Washington to reverse its tariff rises on the country. They represent a new era of Chinese economic statecraft — evidence of a sanctions policy capable of pressuring not only small neighbours but also the world’s largest economy.”
July 8 – Reuters (Lisa Baertlein): “U.S. imports of containerized goods from China tumbled 28.3% year-on-year in June, after higher tariffs on goods from the country’s top ocean trade partner extended a steep drop that began in May, supply chain technology provider Descartes said… Overall U.S. container imports fell 3.5% from June 2024 levels, coming in at 2.2 million 20-foot equivalent units (TEUs).”
Trade War Watch:
July 9 – Associated Press (Paul Wiseman): “President Donald Trump and his advisers promised a lightning round of global trade negotiations with dozens of countries back in April. White House trade adviser Peter Navarro predicted ‘90 deals in 90 days.’ Administration officials declared that other countries were desperate to make concessions to avoid the massive import taxes – tariffs — that Trump was threatening to plaster on their products starting July 9. But the 90 days have come and gone. And the tally of trade deals stands at two… Trump has also announced the framework for a deal with China, the details of which remain fuzzy. Trump has now extended the deadline for negotiations to Aug. 1 and tinkered with his threatened tariffs, leaving the global trading system pretty much where it stood three months ago — in a state of limbo as businesses delay decisions on investments, contracts and hiring because they don’t know what the rules will be.”
July 7 – Wall Street Journal (Editorial Board): “President Trump sure knows how to spoil an economic mood. Three days after he signed the GOP’s big budget bill, saving the economy from a scheduled $4.5 trillion tax increase, Mr. Trump was back playing the role of Tariff Man. On Monday he announced 25% tariffs on Japan and South Korea… In letters to Japan’s Prime Minister and South Korea’s President, Mr. Trump huffs and puffs again about bilateral trade deficits, which he mistakenly thinks are a sign of foreign exploitation. ‘We must move away from these longterm, and very persistent, Trade Deficits,’ he says. Hence the new 25% tariffs, starting Aug. 1. This nearly matches Mr. Trump’s paused ‘Liberation Day’ duties on the two countries, except Japan was supposed to get only 24%. Later in the day he sent tariff letters to a dozen other, less economically significant, countries.”
July 8 – Associated Press (Josh Boak): “President Donald Trump… set a 25% tax on goods imported from Japan and South Korea, as well as new tariff rates on a dozen other nations that would go into effect on Aug. 1. Trump provided notice by posting letters on Truth Social that were addressed to the leaders of the various countries. The letters warned them to not retaliate by increasing their own import taxes, or else the Trump administration would further increase tariffs. ‘If for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them by, will be added onto the 25% that we charge,’ Trump wrote in the letters to Japanese Prime Minister Shigeru Ishiba and South Korean President Lee Jae Myung.”
July 8 – Financial Times (Peter Foster and Aime Williams): “Donald Trump’s latest act of trade brinkmanship risks creating a ‘tariff wall’ around the manufacturing hubs of south-east Asia, leading to higher prices and tough choices for US consumers and industry, analysts warn. Ahead of Wednesday’s deadline to cut trade deals with Washington, the US president signalled a fresh round of tariffs on the south-east Asian countries that have become a conduit for Chinese manufacturers looking to escape US levies. He threatened Cambodia, Indonesia, Laos, Malaysia and Thailand with duties ranging from 25 to 40%… Last week, Trump announced that Vietnam — the biggest destination for ‘rerouted’ Chinese goods — had accepted a 20% tariff on its exports to the US, rising to 40% for goods that had been ‘transshipped’.”
July 9 – CNBC (Kevin Breuninger): “Brazilian President Luiz Inacio Lula da Silva said… his country will respond with reciprocity to U.S. President Donald Trump’s newly announced 50% tariff rate on his country’s exports, citing a recently adopted Brazilian law that authorizes the government to take proportional countermeasures.”
July 7 – Bloomberg (S’thembile Cele, Simone Iglesias and Mirette Magdy): “Brazilian President Luiz Inacio Lula da Silva joined South Africa in blasting Donald Trump for his threat to slap extra tariffs against the BRICS, escalating a spat with the US leader during the final day hosting the 10-member group. Lula said the US president was ‘irresponsible for threatening tariffs on social media’ before calling on world leaders to find ways to reduce international trade’s reliance on the dollar, a position shared by the group of emerging market nations. Earlier, South African President Cyril Ramaphosa was the first leader to break cover and criticize Trump for his comments overnight warning BRICS members of penalties for adopting policies he said were ‘anti-American.’”
July 8 – Bloomberg (Stephanie Lai): “President Donald Trump said he would not offer any extensions to a new August 1 deadline for nations to begin paying so-called reciprocal tariffs. ‘TARIFFS WILL START BEING PAID ON AUGUST 1, 2025. There has been no change to this date, and there will be no change,’ Trump wrote… ‘In other words, all money will be due and payable starting AUGUST 1, 2025 – No extensions will be granted.’”
July 8 – Bloomberg (Katharine Gemmell and Martin Ritchie): “President Donald Trump sowed fresh chaos in metals markets by indicating the US would implement a higher-than-expected 50% tariff on copper imports, spurring a record spike in New York futures and a drop in the global benchmark. The plan, announced in an apparently off-the-cuff comment to reporters, marks the latest twist in a tumultuous period for industrial commodities, as the US leader aims to encourage more mining and smelting at home. He’s already raised fees on steel and aluminum imports, while probes into flows of multiple other metals are in train.”
July 8 – Wall Street Journal (Megumi Fujikawa): “Japan will keep trying to strike a trade deal with the U.S. that benefits both sides, Prime Minister Shigeru Ishiba and his ministers said… ‘The Japanese government will avoid easy compromises. We are fully committed to negotiations, while demanding what we should demand and protecting what we should protect,’ Ishiba said… ‘We’ll continue to negotiate with the U.S. toward the new August 1 deadline, aiming for an agreement that safeguards Japan’s national interests and benefits both countries,’ he added. The comments followed the U.S.’s announcement of a 25% tariff on Japanese goods, which is due to kick in Aug. 1. Japan had previously faced a 24% rate that was supposed to take effect this week.”
July 9 – Financial Times (Hannah Kuchler, Chris Kay, and Krishn Kaushik): “Investors shrugged off US President Donald Trump’s threat to impose a 200% tariff on pharmaceuticals, betting that the levy is unlikely to be implemented. Shares in most big European drugmakers traded down on Wednesday but then recovered… Shareholders in India’s huge drugmaking industry, which supplies the US with about 40% of generic drugs, also largely glossed over the threat… Emily Field, an analyst at Barclays, said investors were brushing off the latest pharma tariff threat and dismissing it as ‘rhetoric’. ‘No one is taking it seriously,’ she said. ‘The idea of the Taco trade [Trump always chickens out] still prevails.’”
Budget Watch:
July 9 – Bloomberg (Editorial Board): “In a remarkable achievement, the One Big Beautiful Bill Act got worse with each iteration before finally being enacted last week. On plausible assumptions, the final version will add more than $5 trillion to deficits over the next 10 years, moving the track of public debt from unsustainable to all but unhinged. As Congress turns to its budget for next year, it must grapple realistically with this looming crisis. As written, the measure will add about $3 trillion to the expected 10-year deficit. Include interest payments, and the cost rises to nearly $4 trillion. Assume that assorted ‘temporary’ measures are made permanent — which seems reasonable, given that most of the bill’s cost comes from extending supposedly temporary tax cuts passed in 2017 — and the total could be as much as $6 trillion. Federal debt held by the public would climb from 100% of gross domestic product today to 130% by 2034. (After that, it just keeps going up.)”
July 8 – Reuters (Andrea Shalal and David Lawder): “Treasury Secretary Scott Bessent… said the U.S. has taken in about $100 billion in tariff income so far this year, and this could grow to $300 billion by the end of 2025 as collections accelerate from President Donald Trump’s trade campaign. Bessent… said the major collections from Trump’s new tariffs only started during the second quarter… ‘So we could expect that that could be well over $300 billion by the end of the year,’ Bessent said. A Treasury spokesperson said the $300 billion target corresponds to the December 31 end of calendar 2025…”
July 9 – Wall Street Journal (Karl Rove): “Congressional Republicans are likely relieved. Passing the One Big Beautiful Bill Act required President Trump to manhandle dozens of GOP lawmakers. The House leadership twisted arms on an epic scale to get a bill done—twice. Even then, Vice President JD Vance had to break a tie in the Senate. It is extraordinary that congressional Republicans and the White House ran this gigantic piece of legislation with so many moving parts through the House, squeaked through the Senate, then got the House to accept the upper chamber’s changes and pass it again—all before the president’s July 4 deadline. That was the easy part. Now, Republicans must sell the new law to a deeply skeptical public. The GOP will be tempted to ignore Democratic attacks and focus on other issues. That isn’t an option. Like it or not, the One Big Beautiful Bill Act will be the central issue in the midterm election.”
Constitution Watch:
July 9 – Bloomberg (Josh Wingrove and Laura Nahmias): “President Donald Trump said his administration is weighing whether to take control of the city of Washington, DC, to help combat crime, in a move that would represent a dramatic upheaval to the capital’s half-century of home rule. ‘We could run DC. I mean, we’re looking at DC,’ Trump said during a cabinet meeting… ‘We’re thinking about doing it, to be honest with you. We want a capital that’s run flawlessly’… Trump said New Yorkers should not vote for Mamdani in November, calling him a ‘communist,’ and went so far as vaguely suggesting interest in exerting some federal influence on the city. ‘If a communist gets elected to run New York, it can never be the same, but we have tremendous power at the White House to run places when we have to,’ he said…”
July 10 – New York Times (Tony Romm): “President Trump has long viewed tariffs as a potent weapon for raising revenue, boosting manufacturing and making it easier for American companies to sell their goods abroad. This week, he deployed the threat of steep duties in more novel fashion by seeking to meddle in another country’s politics, a move that has raised new legal questions about the president’s powers over trade… Legal experts described Mr. Trump’s public admonishment as significant, as they questioned whether the president had the authority to issue tariffs in pursuit of purely political objectives. Congress primarily possesses the power to tax imports, though the president may act on his own in limited cases enumerated in law, particularly to protect national security.”
July 7 – Financial Times (Andrew Jack and Molly Taylor): “Dozens of universities across the US risk losing an estimated $1bn in collective tuition fees from new international students unwilling or unable to study in the country as a result of actions by Donald Trump’s administration. Tougher scrutiny of applicants, visas processing delays and immigration detentions on campuses and at the border are striking fear among students and university administrators, which have increasingly looked abroad in recent years to fill places and generate income.”
Ukraine War Watch:
July 8 – Wall Street Journal (Editorial Board): “The biggest news from Israeli Prime Minister Benjamin Netanyahu’s visit to the White House Monday is what Donald Trump said about another part of the world: The U.S. will resume arm shipments to Ukraine in its war for survival against Vladimir Putin. The President is grasping what some of his staffers don’t: Arming Kyiv is realism rooted in America’s security interests. ‘We’re going to send some more weapons,’ Mr. Trump said… ‘We have to. They have to be able to defend themselves. They’re getting hit very hard.’ The President… followed up by unloading on Mr. Putin at a cabinet meeting: ‘We get a lot of bulls— thrown at us by Putin,’ who is ‘very nice all the time, but it turns out to be meaningless.’”
July 9 – Associated Press (Illia Novikov): “Russia fired more than 700 attack and decoy drones at Ukraine overnight, topping previous nightly barrages for the third time in two weeks as Moscow intensifies its aerial and ground assault in the three-year war, Ukrainian officials said… Russia has recently sought to overwhelm Ukraine’s air defenses by launching major attacks that include increasing numbers of decoy drones.”
Middle East Watch:
July 5 – New York Times (Ana Ionova): “Battered by 12 days of war, Iran stands mostly alone and weakened in the Middle East. Yet the Islamic republic has found friends elsewhere in the world. Starting Sunday in Rio de Janeiro, Iran will join a two-day meeting of the BRICS group that includes Brazil, Russia, India, China, South Africa and other countries. It will be a chance for Iran, a newcomer to the group, to show it has powerful allies, even as it faces sanctions and threats of more military strikes over its nuclear program. After Israel and the United States launched military strikes on Iran last month, the BRICS group issued a statement expressing ‘grave concern’ and calling the attacks a breach of international law and the United Nations Charter.”
July 8 – Financial Times (Lee Harris and Chris Cook): “The cost of insuring vessels passing through the Red Sea has surged since Houthi militants resumed attacks on commercial vessels, threatening to disrupt global trade, according to the world’s largest insurance broker. Premiums charged for war risks in the stretch of water between Africa and Asia rose to as much as 1% of the overall value of a ship by Tuesday, from a maximum 0.4% before Sunday’s attack on a Greek-owned cargo ship. Marcus Baker, head of marine and cargo for Marsh McLennan, said this meant the cost of cover for a $100mn vessel had increased from about $300,000 per voyage to as much as $1mn.”
July 10 – Wall Street Journal (Benoit Faucon and Lara Seligman): “For more than 48 hours, two merchant ships in the Red Sea tried to fight off repeated attacks by Houthi fighters who used rocket-propelled grenades, missiles and drones to sink them both, kill at least three crew members and take others hostage. No U.S. or allied warship was around to help. An officer at Cosmoship Management, operator of the Eternity C… said he desperately tried to get assistance from the British navy and a European naval task force as the fight unfolded. He said he was told there were no ships in the area.”
July 9 – Reuters (Renee Maltezou, Yannis Souliotis and Jonathan Saul): “Rescuers pulled six crew members alive from the Red Sea after Houthi militants attacked and sank a second ship this week, while the fate of another 15 was unknown after the Iran-aligned group said they held some of the seafarers. The Houthis claimed responsibility for the assault that maritime officials say killed four of the 25 people aboard the Eternity C before the rest abandoned the cargo ship… The Houthis also have claimed responsibility for a similar assault on Sunday targeting another ship, the Magic Seas.”
Canada Friend and Ally Watch:
July 9 – The Hill (Sarah Fortinsky): “Canadians point to America as both their country’s top threat and its greatest ally, according to Pew Research Center data… The survey… asked residents of 25 countries to name the nation they think poses the greatest threat to their own, as well as the nation they think is their most important ally. Only in Canada did majorities place America at the top of both lists: 55% said most important ally and 59% said the greatest threat.”
July 10 – Bloomberg (Randy Thanthong-Knight and Mario Baker Ramirez): “Canadians are committed to ditching US travel, taking the fewest number of car trips there in the year’s first half since at least 2017, excluding the pandemic. Over the past six months, Canadians returned from just 8 million trips, well below the 11 million entries during the same period in 2024, according to Statistics Canada… In June, Canadian-resident return trips by automobile from the US plunged 33.1% from a year ago.”
AI Bubble Watch:
July 9 – Axios (Erica Pandey): “The people building AI are saying — subtly and unsubtly — that the technology is advancing more rapidly than the vast majority of people realize. It’s likely we won’t know how and how much AI will change the way we live, work and play until it already has. ‘The internet was a minor breeze compared to the huge storms that will hit us,’ says Anton Korinek, an economist at the University of Virginia. ‘If this technology develops at the pace the lab leaders are predicting, we are utterly unprepared.’ Pay attention to what the people closest to the technology are saying. ‘[T]he 2030s are likely going to be wildly different from any time that has come before. We do not know how far beyond human-level intelligence we can go, but we are about to find out,’ OpenAI CEO Sam Altman wrote…”
July 9 – Bloomberg (Mark Gurman and Riley Griffin): “Meta Platforms Inc. has made unusually high compensation offers to new members of its ‘superintelligence’ team — including a more than $200 million package for a former Apple Inc. distinguished engineer. Meta hired Ruoming Pang, who ran Apple’s AI models team, with a pay package in the hundreds of millions over a several-year period, according to people with knowledge of the matter…”
July 9 – Reuters (Laila Kearney): “America’s largest power grid is under strain as data centers and AI chatbots consume power faster than new plants can be built. Electricity bills are projected to surge by more than 20% this summer in some parts of PJM Interconnection’s territory, which covers 13 states – from Illinois to Tennessee, Virginia to New Jersey – serving 67 million customers in a region with the most data centers in the world. The governor of Pennsylvania is threatening to abandon the grid, the CEO has announced his departure and the chair of PJM’s board of managers and another board member were voted out.”
Bubble and Mania Watch:
July 5 – Financial Times (George Steer): “Retail traders ‘buying the dip’ in US stocks this year have racked up the biggest profits since the early stages of the Covid-19 crisis, helping to fuel a rally that has pushed Wall Street equities to record highs. Individual investors have poured a record $155bn into US stocks and exchange traded funds during 2025, according to… VandaTrack, surpassing the meme-stock boom of 2021. They continued to buy even as President Donald Trump’s blitz of tariffs on US trading partners sent stock markets tumbling in April — and their faith in the time-honoured strategy of piling in after stocks fall in anticipation of a rebound has paid off.”
July 10 – Bloomberg (Isabela Fleischmann): “Six months after the worst wildfires in Los Angeles history, luxury real estate agents say the housing market has dramatically changed. Fire safety, evacuation routes and insurance coverage are now priority considerations alongside traditional home features like views and finishings. More people from LA are looking to buy in suburban Orange County or even Texas and Florida… New for-sale listings increased in the LA metro area 14% in the first half of 2025 compared with the same period in 2024, according to Zillow… Los Angeles County home sales sank 7.9% while prices rose 2.9% from a year earlier in May…, the California Association of Realtors reported.”
July 8 – Bloomberg (Kirk Ogunrinde): “Nonfungible tokens, once a burgeoning scene for crypto traders and enthusiasts, seem to have lost much of their allure as trading volumes in the once-hot sector have now declined for the fifth straight quarter. Trading in the digital assets — best known for their collectible cartoon avatars and viral memes — declined to $823 million in the second quarter, down from $4 billion during the prior-year period, according to… DappRadar. A 19% decrease in total trading volume made 2024 the worst year ever for NFT traders, but this year’s data suggest the downturn is far from over.”
July 9 – Wall Street Journal (Katherine Clarke): “An intense bidding war over Paul Newman and Joanne Woodward’s longtime Manhattan residence ended in the one-bedroom, roughly 3,000-square-foot co-op selling for around $14 million, more than 40% above the asking price.”
Inflation Watch:
July 8 – Bloomberg (Michael S. Derby): “Americans’ outlook on inflation was little changed last month as households upgraded their views on the state of their finances and ability to get credit, according to… the New York Federal Reserve. As of June, inflation one year from now was expected to be 3%, down from the expected 3.2% in May, while the outlooks at the three- and five-year-ahead horizons were unchanged at 3% and 2.6%…, according to the latest New York Fed Survey of Consumer Expectations… Amid the calm outlook for future price increases, the survey found that respondents had ‘markedly’ upgraded their assessment of their personal financial situation relative to last year, while noting credit had grown easier to access.”
July 10 – New York Times (Farah Stockman and Peter Eavis): “President Trump’s announcement of a 50% tariff on copper imports is causing concern in some of the industries he says he wants to protect. More than 40% of the copper used in the United States is imported, even though the country has large deposits. Mr. Trump has said that tariffs will help secure the supply chain for industries that are critical for national security, such as semiconductors, shipbuilding and lithium-ion batteries. But the announcement left many executives scrambling to assess the impact on their companies. Copper futures hit a record Tuesday… and the price per pound is up more than 40% this year. Businesses will either have to pass these higher prices onto customers or absorb them.”
July 10 – Bloomberg (Josh Saul): “US electric companies have asked for $29 billion in rate increases so far this year, more than double their requests for the first half of 2024, according to… energy affordability advocacy group PowerLines. The rise is driven by the costs of replacing aging infrastructure and powering data centers for AI. ‘Utilities are responding to new load by proposing new power plants that generally drive up customer bills,’ PowerLines executive director Charles Hua said… Ambitious efforts by tech firms to build massive data centers to develop artificial intelligence have collided with customer anger over rising bills…”
July 10 – Reuters (Tom Polansek): “U.S. President Donald Trump’s plan for a 50% tariff on goods from Brazil will likely raise prices for beef used in American hamburgers, traders and analysts said…, as food manufacturers increasingly rely on imports during a time of declining domestic production… The tariff would slash imports of Brazilian beef and force companies to seek supplies from other nations as Trump is broadening his global trade war, analysts said. ‘If it does not get modified, you just cease the importation of Brazilian beef to this country,’ said Bob Chudy, a consultant for U.S. companies that import beef. ‘Not one pound will be economic at those levels.’”
July 8 – Reuters (Dan Burns): “A gauge of U.S. used vehicle prices sold at wholesale auctions that proved predictive ahead of the inflation surge following the COVID pandemic is climbing again, last month notching its largest annual increase in nearly three years. The rise comes amid ongoing vehicle price and sales volatility connected to auto tariffs… The Manheim Used Vehicle Value Index rose 1.6% in June from May on a seasonally adjusted basis and surged 6.3% from a year earlier, the largest year-over-year increase since August 2022…”
July 8 – Bloomberg (Kristina Peterson): “Consumers may soon be paying more for fresh tomatoes as a decades-long deal with Mexico expires in less than a week… US tomato importer NatureSweet Ltd. told its customers last week that it would have to raise prices nearly 10% if the agreement ends, Chief Executive Officer Rodolfo Spielmann said… ‘There’s no scenario where I can absorb those tariffs,’ Spielmann said. ‘The margins are not high enough.’ That could drive up costs across the country, given NatureSweet’s position as the largest distributor of tomatoes in the US.”
July 10 – Bloomberg (Paulina Cachero): “Manhattan rents hit a record high for the fourth time in the past five months — and there’s no relief in sight for apartment hunters in the market’s busiest season. The median rent on new leases signed in June was $4,625, up 7.6% from a year earlier and $54 more than the previous month, according to appraiser Miller Samuel Inc. and brokerage Douglas Elliman.”
Federal Reserve Watch:
July 9 – Financial Times (Myles McCormick): “The majority of US Federal Reserve officials warned at its June meeting that President Donald Trump’s tariffs would have ‘persistent effects’ on inflation amid a growing schism over when to cut interest rates. Minutes from the Federal Open Market Committee’s meeting on June 17-18 showed that while some rate setters believed the levies would trigger a one-off price increase, most were concerned the inflationary impacts could be more sustained. ‘While a few participants noted that tariffs would lead to a one-time increase in prices and would not affect longer-term inflation expectations, most participants noted the risk that tariffs could have more persistent effects on inflation,’ according to minutes…”
July 9 – Bloomberg (Amara Omeokwe): “The emerging divide among Federal Reserve officials over the outlook for interest rates is being driven largely by differing expectations for how tariffs might affect inflation, a record of policymakers’ most recent meeting showed. ‘While a few participants noted that tariffs would lead to a one-time increase in prices and would not affect longer-term inflation expectations, most participants noted the risk that tariffs could have more persistent effects on inflation,’ the minutes of the Federal Open Market Committee’s June 17-18 meeting said. New rate projections… showed 10 of 19 officials expected at least two rate cuts by year’s end. Seven policymakers, however, projected no cuts at all in 2025, while two projected one cut.”
July 9 – Reuters (Howard Schneider): “Only ‘a couple’ of officials at the Federal Reserve’s June 17-18 meeting said they felt interest rates could be reduced as soon as this month, with most policymakers remaining worried about the inflationary pressure they expect to come from President Donald Trump’s use of tariffs to reshape global trade… ‘Most participants’ at the Fed’s meeting last month anticipated rate cuts would be appropriate later this year, with any price shock from tariffs expected to be ‘temporary or modest,’ the minutes said. There was no indication that any policymaker felt the U.S. central bank’s benchmark overnight rate, currently in the 4.25%-4.50% range, should be cut by several percentage points, as Trump wants.”
July 8 – Bloomberg (Stephanie Lai and Amara Omeokwe): “President Donald Trump said Jerome Powell should ‘resign immediately’ if allegations from an administration official that the Federal Reserve chair misled lawmakers prove true, while deepening his personal attacks against the head of the central bank over interest rate policy. Trump… called Powell ‘terrible,’ and told reporters that if allegations he deceived Congress over renovations to the Federal Reserve’s headquarters proved true, it would be grounds for a swift exit. ‘Then he should resign immediately,’ Trump said. ‘We should get somebody in there that’s going to lower interest rates.’ In a subsequent social media post, Trump accused the Fed chair of ‘whining like a baby about non-existent Inflation for months, and refusing to do the right thing.’ ‘CUT INTEREST RATES JEROME — NOW IS THE TIME!’ Trump wrote.”
July 7 – Bloomberg (Tyler Clifford): “White House trade counselor Peter Navarro says Federal Reserve Chair Jerome Powell’s refusal to lower interest rates is causing ‘serious economic damage’ on the US. Navarro calls on the Federal Reserve board to intervene in comments made on Substack post. If Powell ‘will not voluntarily adjust course, the board must act decisively to prevent further economic harm.’ Fed policy has caused lower federal tax revenues, intensified budget deficits and deepened the national debt, he says. Navarro says American households are feeling ‘acute financial Pain.’”
July 10 – Bloomberg (Amara Omeokwe): “A key Trump official said Federal Reserve Chair Jerome Powell has ‘grossly mismanaged’ the institution and demanded more information about the central bank’s renovation of its headquarters in Washington. ‘The President is extremely troubled by your management of the Federal Reserve System,’ Russell Vought, director of the White House Office of Management and Budget, wrote in a letter addressed to Powell… ‘Instead of attempting to right the Fed’s fiscal ship, you have plowed ahead with an ostentatious overhaul of your Washington D.C. headquarters.’ The letter intensifies the scrutiny of Powell from President Donald Trump, top administration officials and some congressional Republicans amid a broad pressure campaign for the Fed to lower interest rates. The central bank has kept interest rates on hold so far this year, stoking Trump’s ire and prompting the president and administration officials to sharply and repeatedly criticize Powell.”
July 7 – Bloomberg (Amara Omeokwe): “President Donald Trump has acknowledged the intense pressure he’s laying on the Federal Reserve to lower interest rates is, in fact, making it harder for the central bank to do just that… By pledging to pick ‘somebody that wants to cut rates,’ Trump has potentially undermined the next chair’s standing even before they’re selected… ‘People will wonder what sort of promises or implicit promises or winks or nods may have gone on in order to get the nomination,’ said Jon Faust, a fellow at the Center for Financial Economics at Johns Hopkins University and a former special adviser to Powell. ‘I think that’s very bad for the next Fed chair. I think that’s very bad for the credibility of the Fed.’”
July 7 – Bloomberg (Maggie Eastland): “Former Federal Reserve official Kevin Warsh says interest rates should be lower, adding that ‘tariffs are not inflationary.’ Warsh speaks on Fox Business, adding that ‘bad economic Policies’ from the central bank are constraining growth. Fed needs ‘regime change,’ including new personnel, Warsh adds… There is ‘plenty of deadwood’ and some talent at the Federal Reserve…”
July 9 – Reuters (Kanishka Singh and Ismail Shakil): “White House economic adviser Kevin Hassett is emerging as a serious contender to be the next chair of the U.S. Federal Reserve, the Wall Street Journal reported on Tuesday, citing people familiar with the matter. Hassett met with President Donald Trump about the Fed job at least twice in June, the report said. Trump has previously said he has three or four people in mind as contenders for the top Fed job. Those reportedly include former Fed Governor Kevin Warsh, Hassett, current Fed Governor Christopher Waller, and Treasury Secretary Scott Bessent.”
July 10 – Bloomberg (Jonnelle Marte): “Federal Reserve Bank of St. Louis President Alberto Musalem said he sees upside risks to inflation, but it’s too early to know whether tariffs will have a persistent impact on prices. ‘It’s going to take time for the tariffs to settle,’ Musalem said… ‘There’s a scenario where we could be in Q4 this year, or Q1 or Q2 of next year where tariffs are still working themselves into the economy,’ he added…”
July 10 – Reuters (Michael S. Derby): “Federal Reserve Governor Christopher Waller said… the U.S. central bank still has some ways to go in shrinking the size of its holdings, in comments that offer a potential resting size for the ongoing drawdown, while flagging a desire to move the holdings to shorter-dated securities. ‘Given my rough estimate of the level of reserves needed to be ample, I believe we can likely continue to let a share of maturing and prepaying securities roll off our balance sheet for some time, reducing reserve balances,’ Waller said…”
July 9 – Financial Times (Claire Jones): “At the European Central Bank president’s annual forum last month, Christine Lagarde took a moment to lavish praise upon a central banker from outside Europe’s borders. Jay Powell, she said, epitomised the ‘standard of a courageous central banker’, leading to a rousing ovation for the Federal Reserve chair, who sat at the top table with head bowed. The tribute from the central banking elite stood in stark contrast to the treatment Powell had received just hours before from the world’s most powerful man.”
U.S. Economic Bubble Watch:
July 8 – Reuters (Ann Saphir): “U.S. small-business confidence slipped in June, as firms overall felt they had too much inventory on hand amid ongoing trade tensions and declining optimism over the outlook for sales. The National Federation of Independent Business said… its Small Business Optimism Index fell two tenths of a point last month to 98.6… The share of owners reporting labor quality as the single most important problem for their business staying near the levels seen in the spring of 2020 at the onset of the COVID-19 pandemic. The share raising compensation increased to 33%, up 7 points from May, even as the net percent planning an increase in the next three months slipped to 19% from 20% in May.”
July 10 – Associated Press (Matt Ott): “U.S. applications for unemployment benefits fell last week, remaining in the historically healthy range of the past couple years… Jobless claims for the week ending July 5 fell by 5,000 to 227,000, fewer than the 238,000 that analysts forecast… The total number of Americans collecting unemployment benefits for the week of June 28 rose by 10,000 to 1.97 million. That’s the most since November of 2021.”
July 9 – Bloomberg (Molly Smith): “US mortgage applications to purchase a home jumped to the highest level since early 2023 last week, even as borrowing costs barely budged. The Mortgage Bankers Association’s index of home-purchase applications advanced 9.4% in the week ended July 4…”
July 7 – Wall Street Journal (Carol Ryan): “Chances are you haven’t received an invitation to a young friend’s housewarming party in a while… On average, 2.1 million people a year became first-time buyers over the past two decades. Many moved to homeownership straight from the rental market. Unaffordable house prices and high mortgage rates have slowed this flow since 2022. There were 1.1 million first-time buyers last year—380,000 fewer than in 2023 and almost half the historical norm, data from the National Association of Realtors shows. This year could be even worse…”
July 8 – Associated Press (Alex Veiga): “Real estate investors are snapping up a bigger share of U.S. homes on the market as rising prices and stubbornly high borrowing costs freeze out many other would-be homebuyers. Nearly 27% of all homes sold in the first three months of the year were bought by investors — the highest share in at least five years, according to… BatchData. Between 2020 and 2023, the share of homes bought by investors averaged 18.5%. All told, investors bought 265,000 homes in the January-March quarter, an increase of 1.2% from the same period a year earlier, the firm said.”
July 6 – Bloomberg (John Gittelsohn): “Los Angeles was already struggling to revive its fragile economy after the most destructive wildfires in its history erupted six months ago. Now, immigration raids are driving workers crucial to the rebuilding into the shadows. Framers and landscapers are abandoning job sites. Renovations of retail shops have stopped midway. Real estate developers say they’re struggling to find crews to keep projects on track in a sector that relies heavily on immigrant labor. ‘We don’t have enough people to staff the work and we’re scrambling to figure it out,’ said Arturo Sneider, chief executive officer of Primestor, a manager of $1.2 billion in shopping centers and 3,000 apartments under development… ‘It’s triggering delays.’”
July 9 – Wall Street Journal (Liz Young): “More U.S. warehouse space is vacant than at any time in the past 11 years as companies hold off leasing new space amid rapidly changing trade policy. The average warehouse vacancy rate across the U.S. ticked up to 7.1% in the second quarter from 6.9% the previous quarter and 6.1% a year earlier, according to… Cushman & Wakefield. That marked the first time the vacancy rate surpassed 7% since 2014…”
China Watch:
July 10 – Bloomberg: “China should add as much as 1.5 trillion yuan ($209bn) in fresh stimulus to boost consumer spending and maintain currency flexibility to counter US tariffs’ drag on growth, academics including an adviser to the country’s central bank said. The Chinese economy has been facing ‘new disruptions’ since April from rising levies in addition to persistent deflation, according to a Friday report by Huang Yiping, a member of the monetary policy committee of the People’s Bank of China, and two other experts. ‘To address these evolving challenges, China must adopt a more forceful counter-cyclical approach to maintain stable growth, while advancing aggressively with structural reforms,’ the authors said.”
July 7 – Financial Times (Joe Leahy and Haohsiang Ko): “China has strongly criticised companies and local governments for fuelling overproduction that it blames for driving down prices, as inflation figures this week are expected to show that one of the country’s longest bouts of factory price deflation is running unchecked. Chinese producer prices have been mired in deflationary territory since September 2022… In articles across state and party media, Chinese President Xi Jinping and other leading officials have attacked what they call neijuan, or ‘involution’, meaning excessive price competition.”
July 8 – Wall Street Journal: “China’s deflationary pressures remained elevated in June, with factory-gate prices declining at the fastest pace in nearly two years, eclipsing the slight increase in consumer prices. The country’s producer-price index fell 3.6% from a year earlier, widening from May’s 3.3% decline and staying in negative territory for more than two years… Meanwhile, the consumer-price index rose 0.1% from a year earlier in June, compared with May’s 0.1% fall and ending four months of decline.”
July 10 – Reuters (Ziyi Tang and Ryan Woo): “Chinese banks are struggling to comply with new Beijing guidelines to boost consumer credit as they reel from a surge of defaults on personal loans and have a hard time finding households in good financial shape that want to borrow. Since March, financial regulators have issued multiple directives urging banks to offer more, and cheaper, loans to spur consumption… This prompted banks to market personal loans at record low interest rates below 3% initially, before raising them back amid concerns over shrinking profit margins. Loan managers and bank executives told Reuters they are struggling to raise consumer lending, citing subdued demand, as well as concerns over an already rapidly growing pile of bad household debt and uncertainty over their clients’ incomes.”
Central Banker Watch:
July 9 – Wall Street Journal (Ed Frankl): “European Central Bank policymakers should brace for inflation changing more rapidly amid shifting trade policy and geopolitical uncertainty the leader of Germany’s central bank said… ‘We need to be prepared for price developments to become more volatile in general. I am afraid that heightened uncertainty will become the new normal,’ Bundesbank President Joachim Nagel said… Price pressures will remain elevated over the medium term, given structural challenges including an ageing population, geopolitical fragmentation and climate change, said Nagel, who is also a rate setter at the ECB. ‘Maintaining price stability will remain a challenging task going forward,’ he noted.”
Europe Watch:
July 8 – Bloomberg (Michal Kubala and Max Ramsay): “European Commission President Ursula von der Leyen accused China of distorting trade and limiting access for European firms two weeks ahead of a summit between the economic powers. ‘If our partnership is to move forward, we need a genuine rebalancing: fewer market distortions, less overcapacity exported from China, and fair, reciprocal access for European businesses in China,’ von der Leyen told the European Parliament…”
July 8 – Financial Times (Sam Fleming and Mary McDougall): “The UK faces ‘daunting’ risks to the public finances as its soaring debt load leads to ‘substantial erosion’ of its capacity to respond to future shocks, the independent budget watchdog has warned. The Office for Budget Responsibility said… efforts to put the UK on a more sustainable fiscal footing have met with only ‘limited and temporary’ success in recent years. Underlying public debt, which is at its highest since the early 1960s, is set to rise further, the OBR warned. It added that addressing the issue had become ‘considerably more challenging’ given low economic growth and rising interest rates.”
Japan Watch:
July 8 – Bloomberg (Jana Randow, Mark Schroers, and Toru Fujioka): “The Bank of Japan must be vigilant to upside inflation risks and has room to hike interest rates further, according to former Deputy Governor Hiroshi Nakaso. Strong wage growth, firms’ ability to pass on higher costs and rising inflation expectations suggest price pressures in Japan might turn out to be stronger than policymakers currently believe, Nakaso said… ‘Monetary policy in Japan needs to be vigilant not to be left behind the curve,’ said Nakaso, currently chairman of the Daiwa Institute of Research. With real rates still deeply negative, ‘another couple of rate hikes won’t materially change the easy monetary conditions in Japan.’”
EM Watch:
July 7 – Bloomberg (Chiranjivi Chakraborty): “Individuals in India lost over 1 trillion rupees ($12.2bn) during the year ended March, trading equity derivatives in the world’s top destination for such products, according to a study by the country’s securities regulator. Nine out of 10 mom-and-pop investors suffered losses, the study… by the Securities and Exchange Board of India found.”
July 5 – Wall Street Journal (Jared Malsin and Elvan Kivilcim): “Turkish police detained the opposition-affiliated mayors of three important cities on Saturday, widening a clampdown on political rivals of President Recep Tayyip Erdogan following the arrest of Istanbul’s mayor earlier this year. The government has said the detentions are part of an investigation into alleged corruption in opposition-controlled municipalities. Officials of the main opposition party, the Republican People’s Party (CHP), have disputed the charges.”
Leveraged Speculation Watch:
July 9 – Financial Times (Martin Arnold): “Hedge funds and other non-bank groups could face limits on the amount of leverage they can use and may have to provide more disclosure to regulators about their borrowing, under plans put forward by the world’s financial stability watchdog. The Financial Stability Board (FSB) said… its recommended measures… were designed to tackle the build-up of leverage in non-banks, which ‘can be an important amplifier of stress. If not properly managed, it can create risks to financial stability.’ The plans highlight the belief among central bankers and regulators that hedge funds and other non-bank actors such as private credit funds, which often make heavy use of leverage but enjoy lighter regulation than banks, pose one of the biggest threats to the global financial system.”
July 7 – Bloomberg (Chiranjivi Chakraborty and Ashutosh Joshi): “India has gone from being a small player in the highly speculative equity derivatives market to the world’s largest, all within just five years. Daily turnover in the market now sits at around $3 trillion. Demand for so-called equity options in particular has exploded as large numbers of relatively inexperienced retail investors came in search of quick returns. There are concerns that some large market participants have been using sophisticated technology to manipulate the system to their advantage. A study by the Securities and Exchange Board of India found that retail investors lost more than $20 billion on option trades over three years. On July 4, SEBI announced it would seize 48.4 billion rupees ($570 million) from trading giant Jane Street Group, which it claims were unlawful gains made by the US-based firm. It temporarily banned Jane Street from trading in the country’s securities market while it conducts a detailed investigation.”
Social, Political, Environmental, Cybersecurity Instability Watch:
July 8 – Bloomberg (Michelle Ma): “The deluge in Texas last week ranks as one of the deadliest and costliest flash floods in US history, highlighting the mounting threat to communities that aren’t prepared for extreme rainfall. It’s too early to know the exact toll of the flooding in Texas, which killed more than 100 people. But a preliminary estimate from AccuWeather Inc. puts the total damage and economic loss at $18 billion to $22 billion… ‘Flood risks are escalating under climate change,’ said Megan Mullin, a professor of public policy at the University of California, Los Angeles. ‘We’re getting wetter storms, and they’re becoming really concentrated in time in many places, and our infrastructure isn’t set up to protect people from those kinds of storms.’”
July 6 – Axios (Madalyn Mendoza, Astrid Galván and Ben Geman): “While the story of the Texas flooding tragedy and what went wrong is still unspooling, scientists said it provides another reminder that climate change can make extreme rainfall events even worse. ‘[T]his kind of record-shattering rain (caused by slow-moving torrential thunderstorms) event is *precisely* that which is increasing the fastest in warming climate,’ UCLA climate scientist Daniel Swain said… Andrew Dessler, director of the Texas Center for Extreme Weather at Texas A&M, says the floods are ‘exactly what the future is going to hold.’ Dessler added that Kerr County was unprepared and local governments should be ready for ‘more, bigger, extreme events.’”
July 8 – Financial Times (Attracta Mooney): “Western Europe officially experienced its hottest June on record, as scientists warned such an ‘exceptional heatwave’ was likely to become more frequent and intense because of climate change exacerbating extremes of heat, dryness, cold and wet around the world. Even as the global average temperature for June was slightly cooler than a year before as some parts of the southern hemisphere endured a colder winter, the overall global temperature rise was still tracking at 1.55C above pre-industrial levels for the 12 months to the end of June. But the average temperature in western Europe was a high 2.81C above the 1991-2020 average at 20.49C in June…”
July 9 – Bloomberg (Georgina Boos): “Partisan political tensions in the US soared to a six-year high last month, according to a gauge published by the Federal Reserve Bank of Philadelphia, amid clashes over President Donald Trump’s tax bill and immigration policies. The Partisan Conflict Index, which is based on news articles reporting political disagreement, climbed to the highest since January 2019. In recent years, it’s been substantially above the current level only during a period around the start of Trump’s first presidency, and at the time of the government shutdown in late 2013.”
