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Member Briefing June 25, 2025

June 25, 2025

Posted By: Harold King in Daily Briefing,

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Powell Reaffirms Wait-and-See Posture on Rate Cuts, Citing Solid Economy

Federal Reserve Chair Jerome Powell told lawmakers on Tuesday that the central bank remains focused on making sure any one-time increases in prices from higher tariffs won’t turn into an “ongoing inflation problem.” Powell said little in prepared remarks to tee up a rate cut next month. Instead, he said solid economic activity in recent months meant officials could carefully study inflation and employment data to determine whether and when the central bank resumes lowering interest rates following a pause that has so far lasted for six months.

Fed officials held their short-term benchmark rate steady last week in a unanimous decision. But a rift is opening up. A few have concluded that tariffs will have only modest effects on prices and want to resume rate cuts soon. If tariffs hit profit margins instead of prices, they could slow the economy and risk higher unemployment. Others want to stay on hold for longer because they aren’t sure of this and want to see more data. The Fed is trying to see how the dust will settle from the aftereffects of Trump’s April 2 “Liberation Day” tariff announcements, among other policy changes. Most economists expect tariffs to lift prices over the coming months.

Read more at The WSJ

Flash Eurozone PMI Signals Ongoing Malaise Despite Brighter Manufacturing News

The flash PMI® survey data for June showed eurozone business activity continuing to grow at only a very modest rate, continuing the broad trend of near-stalled activity seen so far this year. However, there have been some brighter spots in recent months, notably signs of a steadying manufacturing economy after three years of steep decline, led in June by Germany. The seasonally adjusted HCOB Flash Eurozone Composite PMI Output Index held steady at 50.2, registering only very modest growth by staying just above the 50.0 no-change mark.

While it remains unclear to what extent this reflects improving demand condition in the region or the front-running of US tariffs, there have been encouraging signs in relation to business confidence. Sentiment has improved markedly from a one-and-a-half year low in April, while inflation pressures also remain consistent with a further interest rate reduction, which should in turn help offset some of the dampening effect on demand from broader geopolitical concerns.

Read more at S&P Global

US Consumer Confidence Declines on Economic Concerns

The Conference Board said Tuesday that its consumer confidence index slid to 93 in June, down 5.4 points from 98.4 last month, which represented a brief uptick. The regression surprised economists, who had expected a small uptick this month. In April, American consumers’ confidence in the economy sank to its lowest reading since May 2020, largely due to anxiety over the impact of President Donald Trump’s tariffs.

A measure of Americans’ short-term expectations for their income, business conditions and the job market fell 4.6 points to 69. That’s well below 80, the marker that can signal a recession ahead.
Consumers’ fears of a recession during the next 12 months rose slightly in June and remain elevated.
The Conference Board said that the three components of the expectations Index — business conditions, job prospects, and future income — all weakened.
Concerns about inflation ticked down slightly in June, however, it remains a major concern among respondents, who frequently mentioned higher prices in tandem with tariffs.
It was the sixth straight month that respondents’ views of the job market deteriorated, though the reading remains in positive territory as the U.S. labor market continues to churn out jobs.

Read more at AP

Global Headlines

Middle East

Ukraine

Other Headlines

Policy and Politics

Thune, Facing Opposition, Vows To Complete Senate Work On Trump Bill In Days

Senate Majority Leader John Thune (R-S.D.) is sticking to his ambitious schedule of getting the Republican megabill to President Trump’s desk by July 4, even as he faces objections from Senate GOP colleagues and the Senate parliamentarian to key provisions in the bill. Republican senators are racing to work out their disagreements over Medicaid, renewable energy tax breaks and other provisions before the bill comes to the Senate floor on Thursday or Friday.

Thune told reporters Monday the plan is to move “full speed ahead” and vowed to keep the Senate in session through the scheduled July 4 recess to meet Trump’s deadline. Asked if he has the votes to pass the legislation, Thune replied: “Let’s hope so.” Despite their multiple disagreements, Senate Republicans would be glad to get the sprawling legislation through the chamber quickly to get it out of the political spotlight. The longer they take, the more time Democrats have to take shots at it. They’re accusing their Republican colleagues of cutting vital federal programs to offset the cost of cutting taxes for wealthy individuals and corporations.

Read more at The Hill

New York Could Test the Four-Day Workweek

new proposal in the New York legislature aims to put the concept of a four-day workweek to the test in both private and public sectors. The idea takes shape in the form of two bills in the New York State Assembly, A5423 and A5454, both introduced in February by Phara Souffrant Forrest, who represents the 57th Assembly District in Brooklyn. These aim to establish a "pilot program" for the four-day work week, during which employees will receive a reduction in the overall hours worked "without any reduction in overall pay."

The legislation would amend the state's labor and civil service laws to establish the pilot program and outline guidelines for participating employers. The state's Division of the Budget would also be required to identify agencies "for which a four-day workweek is feasible and beneficial for at least sixty percent of state employees." In drafting the proposal, the assemblymember said she drew on numerous case studies and similar pilot programs in the United States and abroad.

Read more at Newsweek

SCOTUS Denies Petition To Stop Retrial Of 'Buffalo Billion' Defendants

The U.S. Supreme Court on Monday denied a petition that would have stopped a retrial of the defendants in the "Buffalo Billion" corruption case. The petition, filed on behalf of defendants Louis Ciminelli, a Buffalo developer, Steven Aiello and Joseph Gerardi, executives with Syracuse-based COR Development, and Alain Kaloyeros, former head of SUNY Polytechnic Institute, argued that a retrial defied the double jeopardy clause.

Ciminelli, Aiello, Girardi and Kaloyeros were convicted in 2018 on charges of corruption over upstate construction projects worth hundreds of millions of dollars. In 2023, the Supreme Court overturned their convictions and remanded the case to the Second Circuit Court of Appeals. The Second Circuit then ordered a new trial on a new indictment, according to court documents. The Buffalo Billion was first pitched by then-Gov. Andrew Cuomo in 2012, and offered a billion dollars in government money to projects in Buffalo, including the massive Tesla RiverBend gigafactory.

Read more at NY State of Politics

Political Headlines

Health and Wellness

The Decades-Long Journey To Gilead’s Twice-A-Year HIV Prevention Drug Lenacapavir

In December 1995, the first protease inhibitor was approved by the FDA. Saquinavir was developed by Roche and proved to be a game-changer in the fight against HIV. A cocktail of one protease inhibitor and two nucleoside reverse transcriptase inhibitors (NRTIs) was shown in trials to reduce viral loads to very low levels for up to a year. When these findings were announced at a conference in Vancouver, attendees gave a standing ovation, hugged each other, and cried. This so-called highly active antiretroviral therapy, or HAART, would be a lifesaver for thousands.

But those early regimes were by no means ideal. People with HIV had to take up to 30 tablets a day, at specific times. Missing scheduled doses could mean drug resistance and therapy failure. The debilitating side effects included ’round-the-clock nausea and diarrhea. The big breakthrough, for both Gilead, came in 2001, when tenofovir disoproxil fumarate (TDF) was approved for use against HIV. At a time when resistance was mounting against all existing HIV drugs, TDF became a lifeline for many patients. “That was the seed of the whole Gilead HIV portfolio,” says Cihlar. Gilead combined TDF with another antiviral, emtricitabine, giving us one of the most important HIV treatments so far created. The combination is still prescribed to millions of people. Its approval in 2004 set Gilead on course to become the leading player in HIV therapeutics. And that’s when Tomas Cihlar, Gilead’s leading virologist, started wondering about new potential targets in the virus.

Read more at STAT News

Industry News

US Current Account Surges To Record High In First Quarter

The U.S. current account deficit widened to a record high in the first quarter as businesses front-loaded imports to avoid President Donald Trump's hefty tariffs on imported goods. The Commerce Department's Bureau of Economic Analysis said on Tuesday the current account deficit, which measures the flow of goods, services and investments into and out of the country, jumped $138.2 billion, or 44.3%, to an all-time high of $450.2 billion. Data for the fourth quarter was revised to show the gap at $312.0 billion instead of $303.9 billion as previously reported. The deficit represented 6.0% of gross domestic product, the highest since the third quarter of 2006 when it peaked at 6.3%. That was up from 4.2% in the October-December quarter.

Imports of goods surged $158.2 billion to a record $1.00 trillion, driven by nonmonetary gold and consumer goods, mostly medicinal, dental and pharmaceutical products. Imports of services dropped $1.8 billion to $217.8 billion, weighed down by declines in charges for the use of intellectual property such as licenses for the use of outcomes of research and development. Goods exports increased $21.1 billion to $539.0 billion, the highest since the third quarter of 2022, lifted by capital goods, mainly civilian aircraft and computer accessories, peripherals and parts.

Read more at Yahoo Finance

Federal Investigators Fault Boeing and FAA for Door Plug Blowout

Federal investigators said that Boeing’s BA -0.20%decrease; red down pointing triangle flawed manufacturing processes and inadequate regulatory oversight were among the factors leading to a door plug flying off a Boeing 737 MAX plane last year. The National Transportation Safety Board is holding a public meeting Tuesday to share the findings of its investigation into why the door plug flew off the Boeing 737 MAX plane during an Alaska Airlines flight on Jan. 5, 2024. The board will vote later Tuesday on the likely cause of the accident, as well as safety recommendations.

The investigators noted problems with several of Boeing’s processes, including worker training and repair documentation. For example, workers didn’t document the door plug work, so there is still no final determination on who removed the panel, investigators said. At the time of the accident, Boeing had 24 technicians working on doors at its Renton factory, investigators found. Of those technicians, only one had experience opening a door-plug in the past, and he was on vacation during the time of the service. The NTSB also highlighted ineffective oversight from the Federal Aviation Administration. At the time of the accident, the FAA only maintained records dating back five years, which meant it wasn’t properly auditing systemic issues related to removals, the investigators said.

Read more at the WSJ

Chipmaker Wolfspeed To File For Bankruptcy

Semiconductor manufacturer Wolfspeed has entered a restructuring agreement with its top creditors to cut $4.6 billion in debt through Chapter 11 bankruptcy. The Durham, North Carolina-based company struck a deal with creditors to reduce its total debt by approximately 70% and annual total cash interest payments by 60%, according to a news release. To move forward with the financial restructuring, Wolfspeed said it will soon file for Chapter 11 bankruptcy and complete the process by the end of September. The silicon carbide supplier plans to remain operational during the restructuring.

Wolfspeed has worked to cut costs and rightsize its semiconductor business over the past year after running into financial difficulties. Last November, the company said it would lay off 20% of its workforce and close multiple sites in an effort to save about $200 million. A few weeks earlier, Wolfspeed was approved to receive $750 million in funding through the CHIPS and Science Act to help expand facilities in North Carolina and New York. As part of its effort to cut costs, Werner also said on the call that Wolfspeed is in the final stages of cutting its 150 millimeter chip operations to simplify and exclusively handle the 200 millimeter chip market.

Read more at Manufacturing Dive

Small Modular Reactor R&D Center Planned

An engineering and service center for GE Hitachi’s small modular reactor is planned near the forthcoming Ontario Power Generation nuclear power operation, to open in late 2027. GE Vernova Hitachi Nuclear Energy will invest up to $50 million to launch the center, ahead of the SMR now scheduled to be in operation in 2029. Ontario officials have approved installation of up to four GE Vernova Hitachi Energy SMRs at Darlington, Ontario. The new center will provide engineering and technical services in support of the long-term operation and maintenance of the reactors, and it will serve as “a hub for innovation and training, knowledge-sharing, supply chain engagement and workforce development.”

Small modular reactors are a type of nuclear power plant conceived to have a generating capacity of up to 300 MW(e), which is about one-third of the power produced by of a traditional nuclear power reactor, according to the International Atomic Energy Agency. The concept aims to appeal to utility firms and regulators because it promise to produce large amounts of electricity without carbon emissions, and with construction and operation costs below other nuclear-power generating technologies.

Read more at American Machinist

Oil Prices Falls On Lower Middle East Supply Risk

Oil prices extended losses on Tuesday to hit a two-week low on what the market viewed as lower risk of supply disruptions in the Middle East, though U.S. President Donald Trump accused both Israel and Iran of violating a ceasefire he helped to broker. Brent crude futures were down $3.52, or 4.92%, at $67.96 a barrel by 1322 GMT. U.S. West Texas Intermediate crude fell $3.42, also 4.99%, to $65.09.

Prices also fell as Trump posted on social media platform Truth Social that China can now continue to purchase oil from Iran. The 12-day war has triggered high volatility in oil prices, with Brent crude trading in an $11.86 range on Monday, its widest since July 2022.

Read more at Reuters

Volvo Sells Stake In China's SDLG In Strategic Revamp

Volvo Group on Tuesday said it would sell its 70% stake in China's Shandong Lingong Construction Machinery Co and buy its European construction equipment supplier Swecon as it looks to refocus on core brands. Volvo said that its construction equipment (CE) unit would sell the stake to a fund controlled by minority partner Lingong Group for 8 billion Swedish crowns ($837 million).

In a separate statement Volvo said that it would buy engineering consultancy Swecon's business operations in Sweden, Germany and the Baltics for 7 billion crowns ($731 million). Volvo is focusing on premium and more customer-focused brands, tightening control over its European business while stepping back from China's mid-market while the industry grapples with changing consumer demand and trade tensions.

Read more at Reuters

More Homeowners Find Themselves Underwater

The number of owners who are underwater is small but growing, and they have recently been concentrated in pandemic boomtowns such as Austin, Texas, and Cape Coral, Fla. A rapid rise in prices in these areas was followed by drops of almost 20% in some of them. Those who bought at the top have seen value slip out of their homes since then. Being underwater can have real consequences for, say, homeowners who want to sell. They might hold off if it also means writing a check for the remaining balance to the mortgage company. During the financial crisis of 2008, many owners walked away from their underwater homes, allowing the lender to foreclose, though there is little sign of it happening now.

A typical decade’s worth of home-value growth was packed into just five years, starting in 2020, said Kara Ng, a senior economist at Zillow. Housing demand was driven by a perfect blend of low mortgage rates, high consumer savings and more people desiring larger spaces. Just about every major market experienced robust price growth, but the trend was turbocharged in some Sunbelt cities where remote workers flocked during the pandemic. The record-fast growth cooled off around when mortgage rates began to rise in 2022 and affordability became stretched. A construction boom added supply to meet demand. There is now a more balanced market between buyers and sellers.

Read more at The WSJ

Home Price Hikes Are Slowing More Than Expected

Rising supply and slowing demand in the housing market are finally causing prices to cool off, and the weakness is accelerating. Home prices nationally rose just 2.7% in April compared with the previous year, according to the S&P CoreLogic Case-Shiller Index released Tuesday. That is down from a 3.4% annual increase in March and is the smallest gain in nearly two years. The report is slightly back-dated, as it is a three-month running average of prices ending in April. Other more current readings of the market, such as one from Parcl Labs, shows prices nationally are now flat compared with a year ago.

S&P Case-Shiller found the deceleration in prices was taking hold across the 10- and 20-city composites its index measures. Both are now substantially below their recent peaks. In addition, much of the annual increase in the April reading occurred in just the past six months, meaning prices got a boost from the spring market rather than showing up throughout the year. New York saw the biggest increase in prices, with a 7.9% annual gain, followed by Chicago at 6% and Detroit at 5.5%. This is a shift from the first years of the pandemic, when the Sun Belt was seeing huge demand and big price gains.

Read more at CNBC

Crooked Trees: America’s Top Logger Bets It Can Make Money Off Them

Weyerhaeuser has broken ground on a $500 million plant in Arkansas to produce engineered lumber from the small trees that have piled up across the pine belt after the closure of many pulp and paper mills. Several ventures have sought to capitalize on the pulpwood glut, including burning it to generate electricity—locally and abroad—and manufacturing oriented strand board, a type of wood panel known as OSB.

The factory near Monticello, Ark., will produce TimberStrand, a laminated strand lumber made by pressing together and gluing thin slices of wood. It is stronger and stays straighter than regular lumber and is used for headers and footers and to frame tall walls, and for studs that hold up cabinets and heavy tile. Weyerhaeuser and others currently make laminated strand lumber with low-value hardwood, such as aspen and birch. Weyerhaeuser has a facility in Ontario, Canada, that is perpetually sold out. Chief Executive Devin Stockfish said Weyerhaeuser figured out how to use Southern yellow pine.

Read more at WSJ

Honda Has Successfully Launched And Landed A Reusable Rocket

Honda has been busy testing a new Type R. Where the 'R' is a rocket, that is. The carmaker’s R&D subsidiary successfully executed Japan’s first take-off and landing of a reusable rocket at its research base in Hokkaido. The rocket, aka 'reusable launch vehicle' (RLV), measures over six metres long, 85cm wide and weighs 900 kilos, and on this jolly little expedition, reached an altitude of almost 300 metres with liquid fuel propulsion. We’re not told how much rocket fuel was required, or how hot it burned, but we’re guessing the answers are ‘a lot’ and ‘very’.

After roughly a minute airborne, the RLV was then brought back to a point within 37cm of the landing spot. Honda’s been working on creating an RLV (as opposed to the conventional 'expendable launch vehicle' (ELV) to ferry small satellites into orbit for about six years now, as part of a broader push into the ‘mobility of the future’. And it’s not alone in the race to reach realms beyond Earth. Geely, GM, Hyundai-Kia, Toyota and Venturi have been teaming up with space-related mates, and making machines bound for the cosmos, too.

Read more at BBC Top Gear

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