Member Briefing July 28, 2025
Underlying Demand for Durable Goods Weakens in June
Aircraft-related volatility continued to whipsaw overall durable goods data for June. As expected, the surge in orders for nondefense aircraft in May was met with a sizable pullback in June, which pulled overall orders for new durables down 9.3% during the month. For a cleaner read of underlying demand conditions we exclude the transportation sector, which shows orders were up 0.2% last month.
Yet despite that better outturn, underlying orders activity was still rather weak. Core capital goods orders, which excludes defense spending and aircraft specifically, fell 0.7% in June, and although that came with a slight upward revision to May's data, it signals a slowdown amid the monthly volatility seen throughout the first half of the year. The Durable Goods Orders is a key indicator of manufacturing activity and economic health. A higher reading generally signals increased economic activity as businesses ramp up their production to meet demand.
US and EU Clinch Deal With Broad 15% Tariffs On EU Goods To Avert Trade War
The United States struck a framework trade deal with the European Union on Sunday, imposing a 15% U.S. import tariff on most EU goods, but averting a spiralling battle between two allies which account for almost a third of global trade. The announcement came after European Commission President Ursula von der Leyen travelled for talks with U.S. President Donald Trump at his golf course in western Scotland to push a hard-fought deal over the line. The deal mirrors parts of the framework agreement the United States clinched with Japan last week.
The deal, that also includes $600 billion of EU investments in the United States and significant EU purchases of U.S. energy and military equipment, will indeed bring clarity for EU companies. However, the baseline tariff of 15% will be seen by many in Europe as a poor outcome compared to the initial European ambition of a zero-for-zero tariff deal, although it is better than the threatened 30% rate. The EU had prepared countertariffs on 93 billion euros ($109 billion) of U.S. goods in the event there was no deal and Trump had pressed ahead with 30% tariffs.
New Home Sales Edge Higher in June
Sales of new U.S. single-family homes increased less than expected in June amid higher mortgage rates, pushing inventory to levels last seen in late 2007, which could keep homebuilding subdued. New home sale units rose 0.6% to a seasonally adjusted annualized rate of 627,000 units last month, the Commerce Department's Census Bureau said on Thursday. The sales pace for May was unrevised at a rate of 623,000 units.The slight gain, which follows a sharp contraction in May, reflects weak buyer demand resulting from challenging affordability conditions and heightened economic uncertainty.
The inventory of unsold homes on the market increased to 511,000 units, the highest level since October 2007, from 505,000 in May. At June's sales pace it would take 9.8 months to clear the supply of new houses on the market, up from 9.7 months in May. The inventory glut is weighing on new house prices. The median new house price dropped 2.9% to $401,800 in June from a year earlier. A National Association of Home Builders survey last week showed the share of builders cutting prices to attract buyers rose in July to the highest level since 2022.
Global Headlines
Middle East
- Israel Begins A Limited Pause In Fighting In 3 Gaza Areas As Air Drops Begin – AP
- Jordan And UAE Begin Air Drops Into Gaza After Israel Announced Series Of Aid Measures - BBC
- Netanyahu, Trump Appear To Abandon Gaza Ceasefire Negotiations With Hamas - Reuters
- US ‘Strongly Rejects’ French Plan To Recognise Palestine, Saudis Hail ‘Historic Decision’ – France 24
- Exiled Iranian Prince Says 50,000 Defectors Have Contacted Him To Help Topple Regime - Politico
- How Iran Missiles Prepared US Patriot Units for Pacific War - Newsweek
- Israel Again Intercepts Gaza-Bound Ship Carrying Activists And Humanitarian Aid - AP
- Interactive Map- Israel’s Operation In Gaza – Institute For The Study Of War
- Map – Conflicts in the Middle East – Live Universal Awareness Map
Ukraine
- Five Killed As Ukraine And Russia Trade Drone Attacks – BBC
- Russian Offensive Campaign Assessment, July 26, 2025 – Institute for the Study of War
- Russia Lifts Lid On Secretive Drone Factory As Satellite Images Reveal Rapid Expansion At Key Site - CNN
- Zelensky Seeks EU Support While Ukraine Struggles With Corruption – France 24
- ‘Commanders Saw Us as Expendable’: A Russian Soldier’s View of the War - WSJ
- Russia Blasts New Iran Satellite Into Space - Newsweek
- Russia Scales Down Celebrations Honoring Its Navy As Ukraine Launches More Drone Attacks - AP
- Interactive Map: Assessed Control Of Terrain In Ukraine – Institute For The Study Of War
- Map – Tracking Russia’s Invasion Of Ukraine – Live Universal Awareness Map
- Other Headlines
- Taxpayer Group Demands Probe Into EU Green Deal Architects Over NGO Funding – Politico
- Venezuelan Little League Team Denied US Visas For World Series – The Hill
- China Releases AI Action Plan Days After The U.S. As Global Tech Race Heats Up - CNBC
- Wildfires Rage In Greece As Extreme Heat Persists - BBC
- Thailand And Cambodia Clash: A Border Dispute Fueled By Nationalism – France 24
- Tens Of Thousands Flee Their Homes As Thailand And Cambodia Clash - Politico
- Thai And Cambodian Leaders To Meet In Malaysia For Talks To End Deadly Border Dispute - AP
- European Central Bank Pauses, But Further Easing Still Possible – Wells Fargo
- Crowd Surge At Hindu Temple In Northern India Leaves At Least 6 Dead – AP
Policy and Politics
What to Expect from the July Fed Meeting This Week
It feels like everybody wants lower interest rates: President Donald Trump, the Treasury secretary, and even members of the Federal Open Market Committee. But with inflation above target (and potentially moving in the wrong direction, thanks to tariffs) and the economy cooling but still solid, analysts say central bankers still have time to wait. The Federal Reserve is widely expected to hold rates steady for a fifth consecutive meeting. Simon Dangoor, head of fixed income macro strategies at Goldman Sachs Asset Management says that right now, he isn’t seeing signs that financial markets are worried that the Fed is behind the curve on rate cuts. “If anything, you’ve had a period of more stability.”
Against that backdrop, bond futures traders see a 95% chance that the Fed leaves rates steady at its meeting next week. They see roughly 60% odds of a rate cut in September, according to the CME FedWatch Tool. While the Fed is widely expected to vote to keep rates unchanged and Powell is expected to avoid creating headlines, there is one potential opening for what passes for drama out of the central bank: dissenting votes on the decision. Disagreement over the nature of tariff-induced inflation, temporary or not, means analysts will be watching for a rare departure from consensus.
State Law Forces 'All Electric' For 'Most New Building' Construction In January 2026
Starting in January 2026, New York State will be making a big change in building and construction regulations as part of the ongoing state-mandated transition from fossil fuels to all-electric heated homes and buildings as part of the state's climate action policies. The new code by the New York State Fire Prevention and Building Codes Council will require that new buildings including new homes under seven stories be equipped for all electric heating and appliances come January 2026. The goal is to reduce the "carbon footprint" from buildings, which are said to be a major source of emissions.
For now existing buildings will not be affected by these requirements even for renovations. Also there are current exemptions for certain new buildings like restaurants, hospitals, factories, and agricultural buildings. As these requirements take affect there is also confusion, frustration, and perhaps costly consequences for new home buyers according to the regional Builders Association. Buffalo Niagara Building Association President Phil Nanula, who is also President of Essex Homes, says, "New York State ... it's been difficult to get anyone to really listen to any logic on the problems that this poses to us as builders. It was going to create about a $20,000 increase in the cost to build a home."
White House AI Plan Spurs Big Tech Pushback To Proposed N.Y. Regulations
State lawmakers passed a handful of bills to regulate artificial intelligence this session, including labeling deepfake images and videos used in ads and to hold large A.I. companies responsible for potential public safety risks. Large technology corporations are expected to increase their efforts to New York to stay out of their way and leave regulations to the federal government. Gov. Kathy Hochul must sign, amend or veto the measures by the end of the year, and it's unclear how the new federal guidelines will influence her decision. Hochul does not publicly discuss her thoughts on legislation headed for her desk until she makes a decision. She'll likely review the legislation and make a decision at the end of the year.
"AI is likely to be a transformative force for both our economy and society," said Justin Wilcox, executive director of Upstate United. "As with any general purpose technology, the regions that are best prepared to develop and adopt it will see the greatest benefits. In that respect, upstate New York is uniquely well positioned...The economic potential, spanning research, data centers, engineering and programming jobs, will concentrate in areas that are ready to lead in innovation and deployment.”
Read more at NY State of Politics
Political Headlines
- It’s A Year Of Rapid Change, Except When It Comes To Trump’s Approval Numbers – AP
- In Charts - ​Here Are the Winners From Trump’s Tax Bill - WSJ
- Under Trump, Uncle Sam Is Becoming An Active Investor At A Scale Not Seen Outside War Or Major Crises - CNBC
- Trump Notches Winning Streak In Supreme Court Emergency Docket Deluge – The Hill
- Hochul Open To Redistricting Early, Experts Argue That's Tough To Do – NY State Of Politics
- Democrats Get Lowest Rating From Voters in 35 Years, WSJ Poll Finds - WSJ
- Ethics Panel Directs Ocasio-Cortez To Make More Payments For Met Gala ‘Tax The Rich’ Outfit – The Hill
- Inside Trump’s Plan To Keep Control Of Congress In 2026 - Politico
- American Sentenced To 8½ Years In Prison For Helping North Koreans Get Jobs At Nike, Other U.S. Firms - WSJ
- Trump Tracker: Keep Tabs On The Latest Announcements And Executive Orders - WSJ
Health and Wellness
RFK Jr. Approves Removal Of Thimerosal From All US Flu Vaccines
U.S. Health and Human Services Secretary Robert F. Kennedy Jr. has signed off on a recommendation to remove thimerosal from all influenza vaccines, even though numerous studies have found no evidence the mercury-based preservative is harmful. The Centers for Disease Control and Prevention's Advisory Committee on Immunization Practices (ACIP) voted at their June meeting that all children, pregnant women, and adults should only receive single-dose flu vaccines that are free of mercury.
The vote came following a presentation by the leader of an anti-vaccine group that was founded by Kennedy. Anti-vaccine groups — and Kennedy — have long tied thimerosal in vaccines to autism. However, study after study has found no evidence to support that claim, or that it is linked to any other harm.
Industry News
Trade Wars
Trump and EU Reach Tariff Deal, Avoiding Trade War – CNBC
EU Pact Imposes Baseline Tariff Of 15% On The U.S.’S Biggest Trading Partner - Reuters
US Steel And Aluminium Tariffs Remain At 50% in EU Deal - WSJ
Donald Trump Is On The Verge Of Winning His Trade War – Le Monde
Lula Says The US Has Ignored Brazil’s Attempts To Negotiate Trump’s Announced Tariff - AP
India-UK Free Trade Deal: Modi And Starmer Sign 'Landmark' Agreement - BBC
Here’s How A Major Mexican Tomato Exporter Is Affected By Trump’s 17% Tariff - AP
US, China To Resume Tariff Talks In Effort To Extend Truce – Reuters
US-China Trade Talks: Can China Reduce Its Export Dependence? – AP
Volkswagen Cuts Guidance After Taking $1.5 Billion Hit From U.S. Tariffs In First Half
Europe’s biggest carmaker posted operating profit of 3.83 billion euros ($4.49 billion) for the three months through June, down 29% from 5.4 billion euros a year ago. Analysts had expected second-quarter profit to come in at 3.94 billion euros, according to a Factset-compiled consensus. Volkswagen reported second-quarter sales revenue of 80.8 billion euros, also missing analyst expectations of 82.2 billion euros. The automaker said the impact of U.S. tariffs alone cost the company 1.3 billion euros in the first six months of the year. Restructuring provisions, meanwhile, amounted to 700 million euros over the same period.
Looking ahead, Volkswagen said its 2025 operating return on sales is now expected to range between 4% to 5%, down from a previous forecast of 5.5% to 6.5%. Full-year sales are expected to come in line with the level achieved as last year, compared to a rise of up to 5% previously. The results come as Europe’s automakers struggle to get to grips with a series of industry challenges, including robust competition from Chinese car brands and U.S. President Donald Trump’s import tariffs of 25%.
Intel to Lay Off 15% of Workers, Cancel Billions in Projects in Bid for Rebound
Intel detailed dramatic steps to revive its sagging fortunes, outlining layoffs of 15% of its workforce and scrapping plans to spend tens of billions of dollars on new chip facilities in Europe. The chip-making giant said Thursday it would refocus its strategy on the highly competitive market for AI chips, regaining market share in personal computer processors and developing its advanced 14A technology to sell to large customers.
Intel, which has long dominated the business of making chips for laptops and desktop computers, fell far behind competitors like Nvidia, Advanced Micro Devices and Taiwan Semiconductor Manufacturing Company after it failed to anticipate the surge in demand for the powerful chips fueling the artificial-intelligence boom. “There are no more blank checks,” Intel Chief Executive Lip-Bu Tan wrote in a memo to staff. “Every investment must make economic sense.”
‘He’s Showing Up.’ Things Are Getting Better At Boeing Under CEO Ortberg. Can He Keep It Going?
After spiraling from crisis to crisis over much of the past seven years, Boeing is stabilizing under CEO Kelly Ortberg’s leadership. Ortberg, a longtime aerospace executive and an engineer whom the manufacturer plucked from retirement to fix the problem-addled company last year, is set this week to outline significant progress since he took the helm a year ago. Boeing reports quarterly results and gives its outlook on Tuesday. Ortberg told investors in May that the manufacturer expects to generate cash in the second half of the year. Boeing’s aircraft production has increased, and its airplane deliveries just hit the highest level in 18 months.
It’s a shift for Boeing, whose successive leaders missed targets on aircraft delivery schedules, certifications, financial goals and culture changes that frustrated investors and customers alike, while rival Airbus pulled ahead. “The general agreement is that the culture is changing after decades of self-inflicted knife wounds,” said Richard Aboulafia, managing director at AeroDynamic Advisory, an aerospace consulting firm. Analysts expect the company to post its first annual profit since 2018 next year.
Air Cargo Prices Lose More Altitude In June
Air freight spot rates dropped in June as capacity outstripped demand for the first time in 19 months and tariff policy concerns swirled, Xeneta reported July 4. The global air cargo spot rate in June fell for the second consecutive month, tumbling 4% year over year to $2.50 per kilogram. Rates from Southeast Asia to North America were down 11% YoY to $4.79 per kilogram, while prices from Northeast Asia to North America rose 8% YoY to $4.72 per kilogram.
“It’s wrong to think falling air cargo rates on key trade corridors automatically represent a boon for shippers,” said Chief Airfreight Officer Niall van de Wouw. “With weaker consumer confidence, low rates are little comfort when underlying demand is deteriorating.” Freight forwarders also remained cautious in June, with 46% of procured volumes rooted in the spot market. Xeneta said the decision may mean that forwarders expect rates to fall further.
Read more at Supply Chain Dive
The Chief Of Naval Operations Nominee Caudle To Shipbuilders: “We Need Transformational Improvement”
The White House’s pick to lead naval operations wants shipbuilders to double their production capacity to honor the trilateral agreement with Australia and the U.K. “We need a transformational improvement and the ability to deliver twice the capacity that we're currently delivering,” Adm. Daryl Caudle, who leads U.S. Fleet Forces Command and is nominated to be the chief of naval operations, told senators Thursday during his confirmation hearing.
“The delivery pace is not where it needs to be to make good on the [pillar] one of the AUKUS agreement, which is currently under review by our Defense Department…I think rightly so. We do have to understand whether or not the industrial base can produce the submarines required so that we can make good on the actual pact that we've made with the U.K. and Australia, which is around 2.2 to 2.3 Virginia class submarines per year. That's going to require a transformational improvement, not a 10 percent improvement, not a 20 percent—a 100 percent improvement.” Caudle called on the nation’s largest naval shipbuilders to get creative to bring employee attrition rates down.
Rolls-Royce Sells Naval Casting Operations to Fairbanks Morse Defense
Rolls-Royce reports it completed the sale of its Naval Propulsors business to Fairbanks Morse Defense, including specialty and stainless steel foundry in Pascagoula, MS, that casts large-scale propulsion components for the US Navy, including controllable pitch propeller blades, hub body castings, large fixed-pitch propellers, and waterjets. The terms of the sale were not announced. Fairbanks Morse Defense, headquartered in Beloit, WI, builds, maintains, and services naval power and propulsion systems for the U.S. Navy, U.S. Coast Guard, Military Sealift Command, and Canadian Coast Guard.
Rolls-Royce had announced its plan to sell its naval propulsors business in September 2024. It is a critical part of the defense supply chain, and the only privately owned foundry in the U.S. capable of casting large, “Navy standard” propulsor systems. Rolls carried out upgrades of the casting and machining operations in 2020 and 2022. A separate sale of Rolls’ Naval Handling business in Peterborough, Ontario, also to Fairbanks Morse Defense, is still pending. Rolls-Royce retains the Naval Gas Turbines and Generator Sets operations, which provide power technologies for naval propulsion and onboard power needs.
Read more at Foundry Management & Technology
GE Urges Pentagon to Keep Up with Adaptive Engine Tech
GE Aerospace CEO H. Lawrence Culp is urging the Pentagon to press on with the Navy F/A-XX fighter program, arguing that it will further the development of adaptive engine technology—which faces delays in the Air Force’s latest budget. Adaptive technology provides more acceleration for fighter maneuvers, but also offers reduced fuel consumption in cruise or loiter modes.
GE first developed its XA100 adaptive cycle engine for the Air Force’s Adaptive Engine Transition Program, meant for the F-35 fighter, alongside rival Pratt & Whitney’s XA100. Both engines completed testing, but the Pentagon opted not to pursue either as an upgrade for the F-35, and the Air Force said it couldn’t afford to pursue it alone. Instead, the Air Force has focused on its Next-Generation Adaptive Propulsion program, meant to power its Next-Generation Air Dominance Fighter, now called the F-47, and the Navy’s F/A-XX. GE and Pratt have matching $3.5 billion contracts to develop NGAP, but both the engine program and the F/A-XX effort face headwinds.
Read more at Air and Space Forces
A Couple Works to Save Paul Revere’s Company in Rome NY
American revolutionary and metalsmith Paul Revere developed rolled copper sheathing to protect the wooden hulls of ships from rot. Today, Revere is one of a handful of copper rollers in the U.S. The companies melt scrap and copper concentrate from ore to make coils, sheets, strips, bars, rods and other products widely used in electrical equipment, computer gear, auto parts and construction materials. In the largely dismal U.S. copper industry, after decades of struggles, the company is growing. It is adding equipment to its new plant in Mebane, N.C., to triple output of copper bars. It’s a bet that demand for bars used in electrical equipment will keep exploding due to the construction of computer data centers with their big demand for electricity and other electrical infrastructure. President Trump’s plans for a 50% tariff on imported copper starting Aug. 1 should help, too, by driving up the cost of imported bars.
A motorcycle accident led Mike O’Shaughnessy to a CEO job, love and a chance to save the company. At Revere Copper Products, Mike met Amy, a Revere lifer, who, like him, was divorced with two children. Mike succeeded his father as CEO after Brian O’Shaughnessy suffered serious injuries on his motorcycle in 2007. Brian had come to Revere in the 1980s with an investment group that bought the company. He acquired Revere’s copper and brass business in 1988 and converted it to an employee-owned company. Mike’s brother, Ryan, joined the company as chief financial officer in 2003. Mike, 55, and Amy, 47, married in 2015.