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Member Briefing June 19, 2025

June 19, 2025

Posted By: Harold King in Daily Briefing,

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Fed Holds Key Rate Steady, Still Sees Two Cuts This Year

The Federal Reserve on Wednesday kept interest rates steady amid expectations of higher inflation and lower economic growth ahead, and still pointed to two reductions later this year. The Federal Open Market Committee kept its key borrowing rate targeted in a range between 4.25%-4.5%, where it has been since December. Along with the rate decision, the committee indicated, through its closely watched “dot plot,” that two cuts by the end of 2025 are still on the table. However, it lopped off one cut for both 2026 and 2027, putting the expected future rate cuts at four, or a full percentage point.

Economic projections from meeting participants pointed to further stagflationary pressures, with participants seeing gross domestic product advancing at just a 1.4% pace in 2024 and inflation hitting 3%. The revised forecasts from the last update in March represented a decrease of 0.3 percentage points for GDP and an increase of the same amount for the personal consumption expenditures price index. The unemployment outlook saw a small revision, up to 4.5%, or 0.1 percentage point higher than March and 0.3 percentage point higher than the current level. The FOMC statement changed little from the May meeting. Broadly speaking, the economy grew at a “solid pace,” with “low” unemployment and “somewhat elevated” inflation, the committee said. Moreover, the committee indicated less concern about the gyrations of the economy and the clouds over White House trade policy.

Read more at CNBC

Housing Starts and Permits Plunge in May

Construction of new homes fell 9.8% in May, as builders pulled back amid waning demand from home buyers. Housing starts fell to a 1.26 million annual pace from 1.39 million the previous month, the government said. The annual pace refers to how many houses would be built over an entire year if May’s rate of construction were to continue. The pace of home building is down to the lowest level since May 2020 — during the peak of the COVID-19 pandemic. New-home construction is down 4.6% from the same period a year ago. Building permits, a sign of future construction, also fell 2% from the previous month to a 1.39 million rate.

Builders have slowed down the construction of new homes primarily due to a pullback in buyer demand. Rising inventory levels and weak buyer demand have resulted in homes sitting longer on the market. More builders are also resorting to home prices to encourage buyers. At the same time, “builders are operating in a very challenging environment and it showed up in the May construction data,” Danielle Hale, chief economist at Realtor.com, told MarketWatch.

Read more at Wells Fargo

NYS Private Sector Employment Up 7,500 Jobs in May 2025, Hudson Valley Employment Up 400

According to preliminary seasonally adjusted figures released Wednesday by the New York State Department of Labor, the number of private sector jobs in New York State increased over the month by 7,500, 0.1%, to 8,471,200 in May 2025. The number of private sector jobs in the U.S. increased by 0.1% in May 2025. New York State's private sector jobs (not seasonally adjusted) increased by 88,300, or 1.1%, over the year in May 2025, equal to the 1.1% increase in the number of private sector jobs in the U.S.

Private sector jobs in the Hudson Valley rose by 4,900 or 0.6 percent, to 837,400 over the year in May 2025. Job gains were largest in private education and health services (+4,400), leisure and hospitality (+1,400), financial activities (+600), manufacturing (+600), professional and business services (+600) and trade, transportation and utilities (+200). Job losses were greatest in mining, logging and construction (-1,900), information (-800) and other services (-200). Year-over-year, Sullivan County grew the fastest – up 3.2 percent. The second fastest growth was recorded in the Kingston MSA (+1.1 percent). Putnam County was the only area that declined over the period – down 0.8 percent.

Read the Labor Market Report

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Policy and Politics

Senate Republicans' Changes To 'Big Beautiful Bill' Tee Up Clash With House

The Senate Finance Committee released the highly-anticipated legislative text Monday, which tackles issues like Medicaid and clean energy tax credits. "This bill prevents an over-$4 trillion tax hike and makes the successful 2017 Trump tax cuts permanent, enabling families and businesses to save and plan for the future," said Chairman Mike Crapo, R-Idaho., in a statement. Senate Democrats blasted the proposal, but their criticism is essentially moot, since Republicans are using a budget tool called reconciliation that would enable them to pass the bill along party lines.

The Finance Committee plan was unveiled a day before the nonpartisan Congressional Budget Office released a long-awaited alternate estimate for a version of the bill that passed the House in May. The updated figure, which includes projections for both economic growth and added costs from interest accrued on the nation's debt, estimates the House bill would add roughly $2.8 trillion to the deficit over a decade— more than originally projected. House GOP leaders narrowly overcame internal divisions to pass that bill with some members concerned about the impact on the debt and deficit. The new score, combined with the Senate changes, could threaten the delicate coalition leaders amassed to pass the bill in the first place.

Read more at NPR

Assembly Adjourns 2025 Session Without Acting on HEAT Act or Packaging Bill

The Assembly has adjourned at the call of the Speaker. Both houses of the Legislature have now adjourned session at the call of their respective leaders, concluding the 2025 Legislative Session. At this time, the Legislature has not announced plans to reconvene before the 2026 Legislative Session begins in January. The Senate adjourned last Thursday. The Assembly did not take up the HEAT act or the EPR Packaging Bill.

Assembly Speaker Carl Heastie began his closing remarks just before 12:30 a.m. Wednesday, marking the end of the legislative session and any hope that the State Assembly would pass the Packaging Reduction & Recycling Infrastructure Act, one of the most closely watched bills this legislative session. They did vote Tuesday pass consumer protection reforms that expand the powers of the state Attorney General's Office to go after predatory lenders and scammers. The Assembly also did not vote on the Heat Act, instead passing only a key component of that proposal which repeals the 100-foot rule.

Read more at NY State of Politics

Social Security, Medicare Finances Worsen, Bringing Funding Cliffs Sooner

The long-term financial health of Social Security and Medicare worsened last year, according to the federal government’s latest projections, accelerating the funding cliffs for the key safety-net programs in the coming years. Annual reports released by the Treasury Department on Monday show that Social Security’s reserve funds, if combined, would run out of money to fully pay beneficiaries in 2034 — a year sooner than projected last year. And the trust fund that pays Medicare’s hospital bills would be depleted in 2033 — three years earlier than expected.

The change to the financial outlook for Social Security’s reserves was primarily driven by an expansion of benefits to millions of public sector workers that President Joe Biden signed into law in January. In addition, federal actuaries estimated that fertility rates would remain lower for longer and revised downward economic projections that suggest more sluggish long-term wage growth. Medicare’s finances worsened, according to the reports, because of higher than anticipated expenditures and increased expectations about future spending on hospital and hospice care.

Read more at Politico

Political Headlines

Health and Wellness

Therapists Stress Communication During Men’s Mental Health Awareness Month

June marks Men’s Health Month, and while the spotlight often shines on physical well-being, mental health professionals are emphasizing the critical need for awareness around depression and anxiety in men. According to experts, one in ten men experience depression or anxiety, but the majority of them never seek treatment. “It’s pretty common for men to not seek help,” said Dr. Aron Tendler, a psychiatrist with Gray Matters Health. “It’s pretty common for many people with depression to not get help.” Mental health statistics also reveal a more alarming trend, men are four times more likely than women to die by suicide.

Therapist say the stigma surrounding men’s mental health contributes to a high number of deaths, and they stress the importance of getting help when dealing with issues. “The more we push those things down, the more they’re gonna come out in other ways. So the more those experiences pile up, the more stress, depression and anxiety that we experience,” RJ Mcnicholl from The Rock Counseling Group said. “And the world still makes it sometimes difficult for us to talk about those things. So checking in with each other and understanding that some of those things are normal is extremely important.” He said men should start doing what he calls “The three L’s.” Listening, learning, and living. With each other.

Read more at Yahoo News

Industry News

Trade War Updates

Mortgage Demand Drops, Even As Rates Fall To The Lowest Since April

Applications for a mortgage to purchase a home fell 3% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was still 14% higher than the same week one year ago. This as the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, decreased to 6.84% from 6.93%, with points increasing to 0.66 from 0.64, including the origination fee, for loans with a 20% down payment. That was its lowest rate since April and was just 10 basis points lower than the same week one year ago.

Applications to refinance a home loan, which are usually most sensitive to interest rate moves, declined 2% for the week, despite the drop in rates. They were, however, 25% higher than the same week one year ago. Weak consumer sentiment is weighing hard on the housing market, as potential homebuyers pull back.

Read more at CNBC

Defense Firms Flex New Weapons And Contracts At Paris Air Show

The early days of this year's Paris Air Show brimmed with news, from aircraft purchases to factory floor expansions to missile unveilings. The show is among the world's most prestigious. It's where buyers and sellers go to cut deals — and it's where militaries go to flex hardware. Here are some headlines

Boeing officials said the company can "absolutely" handle the U.S. Air Force's F-47 and the U.S. Navy's to-be-awarded F/A-XX at the same time, should it win the latter contract.
Honeywell and Near Earth Autonomy revealed they completed the first autonomous test flight of a Leonardo AW139 helicopter. It happened in May in Phoenix.
Portal Space Systems announced it will open a 50,000-square-foot spacecraft manufacturing facility in Bothell, Washington. It will be just 3 miles from the company's existing design-and-testing hub.
MBDA rolled out what it's calling "one-way effector" — a relatively cheap drone meant to drain enemy air defenses and coffers. The company said the weapon combines expertise in cruise missiles and remote-controlled munitions.
Pratt & Whitney, a part of RTX, will supply TJ150 engines for the Small Cruise Missile, also known as Black Arrow. The arrangement kicked off in April and will run through the first quarter of fiscal 2026.

Read more at Axios

Aviation Shake-Up: Airbus Surges Ahead Of Boeing

Boeing dominated the commercial passenger aircraft market for a long time, but it has lost its title as the world's biggest planemaker to Airbus because it's been making headlines for all the wrong reasons. Air travel is widely regarded as the safest way to cover long distances. Statistically, the drive to the airport poses a greater risk to travelers than the flight itself. But when there is a plane crash — such as that of Air India Flight 171 last week (June 12) — statistics offer little comfort. It killed 270 people, including 241 of the 242 people on board.

For decades, Boeing was the global leader in commercial aviation. But in recent years, the company, which is based in Arlington, Virginia and employs 170,000 people, has struggled, often posting losses. Boeing delivered 348 commercial passenger airplanes last year, but Boeing's deliveries were significantly lower than those of its rival Airbus, which delivered 766 aircraft. Adding to the complexity is the fact that both firms also compete in space and defense. While neither tops the global rankings in defense contracting, Boeing ranks sixth among the world's largest defense companies, well ahead of Airbus, which sits at number 13. Still, both are major players.

Read more at DW

Texas Instruments to Invest $60 Billion in Manufacturing Sites

Texas Instruments TXN 0.85%increase; green up pointing triangle said it plans to invest more than $60 billion across three manufacturing sites in Texas and Utah. The chip maker said the investment would go toward seven semiconductor fabs, expanding its U.S. manufacturing capacity to supply growing demand for semiconductors used in vehicles, smartphones, data centers, satellites and other electronic devices. “Our partnership with TI will support U.S. chip manufacturing for decades to come,” said Commerce Secretary Howard Lutnick.

Texas Instruments said the three sites will manufacture hundreds of millions of U.S.-made chips daily while also supporting more than 60,000 jobs. The locations of the sites are Sherman and Richardson in Texas, as well as Lehi, Utah.

Read more at The WSJ

Boeing Forecasting Significant Demand Growth

Boeing and Airbus are mostly in agreement in their forecast for commercial aerospace market growth, with the U.S. jet-builder issuing a 20-year outlook almost simultaneously with its primary rival. In fact, Boeing’s 2025 Commercial Market Outlook is somewhat more bullish than the Airbus study, seeing global demand for 43,600 new passenger and cargo aircraft during the 2025-2044 period, 180 jets more than Airbus foresees. Like Airbus, Boeing sees the commercial aircraft sectoral growth driven by increasing demand.

In detail, that anticipated total of commercial aircraft by 2044 shows carriers’ will continue to rely heavily on regional and single-aisle aircraft to serve growing passenger traffic resulting from expanding middle-class populations, thanks particularly to emerging markets. According to Boeing, by 2044 single-aisle aircraft will make up 72% of the global fleet, up from 66% in 2024. In another example of Boeing’s higher expectations it anticipates over 21,000 new aircraft deliveries during the 20-year period, compared to the Airbus prediction of 18,930 new deliveries.

Read more at American Machinist

Asian Shipping Rates Fall

The average spot rate to ship a 40-foot container from Asia to the U.S. West Coast slipped at the start of this week to $5,840, down from an average of about $6,000 the prior week, according to online booking platform Freightos. A measure of global ocean shipping rates, the Shanghai Containerized Freight Index, on Friday fell 6.8% from a week earlier, dragged down by an almost 27% decline in rates from Shanghai to the U.S. West Coast, according to HSBC Global Research.

The falling prices are a welcome turnaround for retailers and manufacturers who faced rapidly rising rates starting in mid-May after the U.S. reduced tariffs on imports from China for 90 days, to 30% from 145%, leading to a surge in demand. Shipping specialists expect rates from Asia to the U.S. East Coast to start falling in the coming weeks. The price declines are a sign that ocean carriers’ attempts to increase shipping rates in mid-June are falling flat. “It seems that carriers have overshot or overestimated how strong demand would be,” said Freightos’s head of research Judah Levine.

Read more at The WSJ

DOJ Clears $1.8B Safran-RTX Aerospace Deal With Divestiture

The Justice Department’s Antitrust Division announced that it will require Safran, S.A. and Safran USA Inc. to divest its North American actuation business and related assets to resolve antitrust concerns arising from its proposed $1.8B acquisition of Collins Aerospace’s actuation and flight control business from RTX Corporation. The divestiture resolves concerns that the transaction would recombine assets that were divested as part of the Division’s settlement of United Technologies Corporation’s acquisition of Rockwell Collins in 2018. UTC merged with Raytheon Company in 2020, forming Raytheon Technologies.

The Antitrust Division filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia to block the proposed transaction. At the same time, the Division filed a proposed settlement that, if approved by the court, would resolve the Division’s competitive concerns. “Today’s settlement is a structural solution to an acquisition that would have harmed competition for important aircraft components that are critical to passenger safety. The proposed divestiture to Woodward, an established provider in the aerospace industry, ensures that American customers will continue to benefit from competition,” said Assistant Attorney General Abigail Slater of the Justice Department’s Antitrust Division.

Read more at Yahoo Finance

UAW President Fain Found To Have Retaliated Against Top Officer In Expenses Feud

The federal monitor overseeing the United Auto Workers union has found that its president, Shawn Fain, retaliated against the union's secretary-treasurer after disagreements over spending. Secretary-Treasurer Margaret Mock had some of her duties reassigned for her refusal or reluctance to authorize certain expenditures for Fain's office, New York attorney Neil Barofsky said in a report released on Tuesday. The monitor was appointed in 2021 following a years-long corruption scandal that resulted in the federal convictions of several former leaders. He has since regularly released reports on his team’s investigations into the union's practices. The investigation into allegations about Fain's and Mock's actions was opened in February 2024.

Fain and 10 other union executive board members said in a statement late on Tuesday that Mock failed to live up to the standard of putting union members first. The 11 board members cited alleged failures by Mock including failing to produce a budget, as well as obstructing "critical bargaining and organizing activities." "The UAW International Executive Board has taken multiple corrective steps to address these serious issues in a productive and proactive manner. We stand by our decisions," the board members wrote.

Read more at Reuters

Nippon Steel Completes $14bn U.S. Steel Deal After 18 Months Of Talks

Nippon Steel's $14.9 billion acquisition of U.S. Steel closed on Wednesday, the companies said, confirming an unusual degree of power for the Trump administration after the Japanese company's 18-month struggle to close the purchase. Under the deal terms, Nippon bought 100% of U.S. Steel shares at $55 per share, as it first laid out in its December 2023 offer for the well-known and struggling steelmaker. A press release on the filing also discloses details of a national security agreement inked with the Trump administration, which gives President Donald Trump the authority to name a board member as well as a non-economic golden share.

The golden share gives the U.S. government veto authority over a raft of corporate decisions, from idling plants to cutting production capacity and moving jobs overseas, as previewed in a weekend social media post by Commerce Secretary Howard Lutnick. The share also gives the government a veto over a potential relocation of U.S. Steel's headquarters from Pittsburgh, Pennsylvania, a transfer of jobs overseas, a name change, and any potential future acquisition of a rival business, the release shows.

Read more at Reuters

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