July 25, 2025

Macrofinancial Outlook for the Day

Releases

June 2025: Durable Manufactured Goods Orders Fell By The Most Since The Pandemic

include("../scripts/oxocarbon-plot.jl")
theme(:oxocarbon)
using FredData, DataFrames, Dates
key=ENV["FRED_API_KEY"]
f=Fred(key)
dgorders=get_data(f, "DGORDER";
    observation_start="2019-06-01",
    observation_end="2025-06-02",
    units="pch",
    ).data
# Make the Plot
bar(dgorders.date, dgorders.value;
    alpha=0.75,
    label="",
    xlabel="Month",
    ylabel="% Change, Durable Goods Orders, MoM",
    title="Durable Goods Orders Crash",
    legend=:top
)
hline!([dgorders.value[end]];
    linewidth=2,
    linestyle=:dash,
    label="June 2025",
)
vline!([Date(2025,4,2)];
       linewidth=2,
       linestyle=:dash,
       label="Tariffs",
       )

┌ Warning: Metadata 'notes' not returned from server.
└ @ FredData ~/.julia/packages/FredData/5M7x4/src/get_data.jl:77

Housing

permits=get_data(f, "PERMIT";
    observation_start="2024-01-01",
    observation_end="2025-06-02",
    ).data
# Make the Plot
plot(permits.date, permits.value;
     linewidth=2,
     xlabel="Month",
     ylabel="Housing Construction Permits (Thousands)",
     label="",
     title="Housing Construction Has Fallen Off",
     legend=:top,
     )
vline!([Date(2025,1,20)];
       linewidth=2,
       linestyle=:dash,
       label="Inaguration",
       )
vline!([Date(2025,4,2)];
       linewidth=2,
       linestyle=:dash,
       label="Tariffs",
       )

June 2025: Sales Of Previously Owned Homes Fell 2 Percentage Points More Than Expected. According to CNBC, “Sales of previously owned homes in June fell 2.7% from May to 3.93 million units on a seasonally adjusted, annualized basis, according to the National Association of Realtors. Analysts had expected a drop of just 0.7%. Sales were unchanged from June 2024. This report is based on closings, so contracts that were likely signed in April and May, when the average rate on the 30-year fixed mortgage jumped above 7% a few times and never went below 6.8%, according to Mortgage News Daily. ‘High mortgage rates are causing home sales to remain stuck at cyclical lows,’ said Lawrence Yun, chief economist for the NAR, in a release. ‘If the average mortgage rates were to decline to 6%, our scenario analysis suggests an additional 160,000 renters becoming first-time homeowners and elevated sales activity from existing homeowners.’” [CNBC, 2025-07-23]

Trade War

Legal Case

Before Trump’s August 1 Tariffs Take Effect, Oral Arguments Will Take Place In A Case On The Legality Of Those Tariffs. According to Bloomberg, “Friday Aug. 1 has been marked on calendars across financial markets, customs compliance offices and government trade departments for weeks since US President Donald Trump declared it the final deadline to do a deal or face his unilateral tariffs. But there’s another, lesser-known day to notch on the diary next week that may prove illuminating on a basic question: whether Trump will be legally allowed to slap all these discretionary tariffs on America’s trading friends and enemies using an authority facing scrutiny in two federal courts. On Thursday July 31, oral arguments are scheduled on Trump’s appeal of one of the earlier rulings against his use of tariffs under International Emergency Economic Powers Act, or IEEPA.” [Bloomberg, 2025-07-24]

Increasing The Trade Deficit

Bloomberg: Trump’s Negotiators Discussed Creating A Fund To Direct Korean Investment Into The United States. According to Bloomberg, “The US and South Korea have discussed creating a fund to invest in American projects as part of a trade deal, similar to an agreement Japan struck Tuesday with President Donald Trump, people familiar with the matter said. The scope of the discussions was not immediately clear, but the US has been seeking pledges totaling hundreds of billions of dollars. The talks remain fluid, the people said, speaking on condition of anonymity to discuss details of the negotiations.” [Bloomberg, 2025-07-24]

Economic Degradation

Less Tourism

While Travel Through May Was Flat Year Over Year, Foreign Arrivals In June Were Down 6.6 Percent Year Over Year. According to Bloomberg, “Some travelers are avoiding the US altogether, and of those who are coming, many are rethinking their budgets. Although some major currencies have recently gained against the dollar, international visitors are still confronting years of US inflation that has driven up the price of hotel stays and restaurant meals, leaving less money in their pockets for shopping. Travel-related spending, which typically grows each year, has been virtually flat this year through May when compared to the same period in 2024, data from the US International Trade Administration show. Meanwhile, foreign arrivals to the US by air were down 6.6% in June compared to last year, according to the ITA.” [Bloomberg, 2025-07-24]

• Trump’s BBB Imposed New Costs On Tourists. According to Bloomberg, “Visitors could be further deterred by the cost of visas, which are set to rise significantly due to new fees detailed in Trump’s multitrillion-dollar tax and spending bill.” [Bloomberg, 2025-07-24]

Q2 2025: Macys CEO Claimed Weaker Tourism Took A Toll On Sales. According to Bloomberg, “The unease among tourists is adding to challenges for everyone from mom-and-pop owned retailers to big companies like Macy’s Inc., where Chief Executive Officer Tony Spring recently indicated that international tourism took a toll on sales last quarter. The company, which owns luxury brands Bloomingdale’s and Bluemercury as well as its namesake stores, said its forward guidance was based on overseas shoppers staying away.” [Bloomberg, 2025-07-24]

Financial Instability

Morgan Stanley: While The Spreads For Levaraged Loans Are Consistent With A Strong Market, The Distribution Of Those Spreads Indicated “Bifrucation.” According to Bloomberg, “But as is becoming habit these days, the aggregate trend camouflages a lot of the real action. Morgan Stanley analysts helmed by Joyce Jiang point out that while investors seem to have shrugged off tariff worries and bid up the overall leveraged loan market, what lies underneath is much more fractured than has been the case in the past: ‘Loan markets continued to strengthen as investors largely discounted tariff concerns. But in contrast to the historical periods when the market was trading at similar levels (e.g., 2Q22, 2Q19), the current market exhibited “fatter” tails, with a greater proportion of loans trading below 80pt and above par. This bifurcation highlights the ongoing performance tiering in the high-rate environment.’” [Bloomberg, 2025-07-24]

Trump’s Fed Vice Chair For Supervision Decided To Host A Conference With Big Bank Representatives To Argue Against Regulation. According to the Wall Street Journal, “The Federal Reserve wants to do things differently this time around. At least when it comes to banking regulation. After a package of strict requirements, known as Basel III endgame, fizzled last year, the Fed on Tuesday convened some of the nation’s top bankers to discuss a new way forward. The first-of-its-kind conference is the creation of the Fed’s new top regulatory official, Michelle Bowman, and her stated goal is more transparency. It featured speakers from JPMorgan Chase, Morgan Stanley, Goldman Sachs—and even a fireside chat with OpenAI’s Sam Altman. The message from bankers is clear: simpler, less onerous rules. Capital requirements dictate the size of the safety buffers banks need to keep to survive periods of market turmoil, and for years bankers had been sparring with Bowman’s predecessor about them. Mike Mayo, a research analyst at Wells Fargo, arrived with a prop: a roll of red tape. “This is the hope,” he said, before pulling out a pair of children’s scissors and taking a snip. ” [the Wall Street Journal, 2025-07-22]