Member Briefing June 26, 2025
US New-Home Sales Drop to Seven-Month Low on Poor Affordability
Following a jump in April, a move up in financing costs slowed new home sales in May. New home sales tumbled 13.7% over the month to the weakest pace in seven months (623K). The South experienced a particularly notable drop-off. The trend so far this year amounts to a 3.2% year-to-date decline in transactions, reflecting mounting headwinds to new home demand. Sales in May weakened across the country, but there was some geographical variation. New home sales rocketed 32% over the month in the Northeast, a region which accounts for a relatively small portion of overall sales. Alternatively, sales plummeted 21% in the South to the lowest level since September 2022.
According to Mortgage News Daily, mortgage rates breached 7.0% in May, reaching the highest level since February. Mortgage rates have retreated somewhat since but remain a substantial barrier to home buying. Rising resale inventory and less-intense price appreciation for existing homes are also notable headwinds, especially as new home inventories remain at their highest point since October 2007. The median new home sold for $426.6K in May, slightly below the $427.8K median price for a resale home. Although new home prices increased 3.0% over the past 12 months, they have generally either been flat or declining since early 2023.
Trump Says He Is Considering Three Or Four Candidates For Next Fed Chair
resident Donald Trump called Federal Reserve Chair Jerome Powell "terrible" and said he knows three or four people who are contenders for the next chair of the Federal Reserve. "I know within three or four people who I'm going to pick," Trump told reporters when asked if he is interviewing candidates to replace Powell. The leading contenders reportedly include former Fed Governor Kevin Warsh, National Economic Council head Kevin Hassett, current Fed Governor Christopher Waller, and Treasury Secretary Scott Bessent.
Trump has repeatedly criticized Powell for not cutting interest rates and has floated the idea of firing him or naming a successor soon, though he nearly as often has walked back those threats, saying on June 12 at the White House, "I'm not going to fire him." Some analysts see this as an effort to influence monetary policy through a "shadow" Fed chair even before Powell leaves office in May 2026.
Conference Board: U.S. Leading Indicators Signal Further Economic Slowdown
The outlook for the U.S. economy dimmed further in May, hit by weakened consumer sentiment and low demand for manufactured goods amid the uncertainty prompted by the Trump administration's trade policies. The Leading Economic Index, or LEI, published last week by The Conference Board, fell 0.1% to 99.0 in May, matching expectations of a consensus of economists polled by The Wall Street Journal. It followed a downwardly revised 1.4% decline in April.
"Consumers' pessimism, persistently weak new orders in manufacturing, a second consecutive month of rising initial claims for unemployment insurance, and a decline in housing permits weighed on the index," said Justyna Zabinska-La Monica, senior manager for business cycle indicators at The Conference Board. However, the recovery of the stock market after the sharp drops in April was the main positive contributor, she noted. While the research group doesn't yet anticipate a recession, it expects a significant slowdown in economic growth in 2025 compared with last year, Zabinska-La Monica added.
Global Headlines
Middle East
- Trump Says US and Iran to Talk Next Week, Mideast War Is ‘Over’ - Bloomberg
- Hegseth Says FBI Probing Leak of Iran Report – The Hill
- Trump Downplays Intelligence Report on Iran Strike - WSJ
- Americans Largely Disapprove Of U.S. Strikes Against Iran, Polls Suggest - Forbes
- Iran ‘Much Further Away’ From Building Nukes After US Strike, Rubio Says - Politico
- A Fragile Ceasefire Between Iran And Israel Gives Rise To Hopes For A Long-Term Peace - AP
- Did A Harvard Report Reveal 377,000 People Are Missing In Gaza? No – France 24
- Interactive Map- Israel’s Operation In Gaza – Institute For The Study Of War
- Map – Conflicts in the Middle East – Live Universal Awareness Map
Ukraine
- Trump Calls Putin the ‘More Difficult’ Partner in Ending Ukraine War - WSJ
- Trump Considers More Patriots For Ukraine, Says Putin "Has To End" The War - Reuters
- NATO Allies Agree 'Ironclad Commitment' To Collective Defence - But No Condemnation Of Russia's War In Ukraine – Sky News
- UK Uses Russian Assets To Boost Ukraine’s Air Defense - Politico
- Drone Debris Found In Ukraine Indicates Russia Is Using New Technology From Iran - AP
- Killing Machines: How Russia And Ukraine’s Race To Perfect Deadly Pilotless Drones Could Harm Us All - Guardian
- Zelenskyy Clings To NATO Hopes As Trump Meeting Looms - Politico
- 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
- China, Taiwan Tensions Heat Up – Seeking Alpha
- At Least Eight People Dead As Anti-Government Protests Grip Kenya – France 24
- NATO Commits To Spending Hike Sought By Trump, And To Mutual Defence - Reuters
- Ishiba's NATO Snub Reflects Discord In US-Japan Alliance – Nikkei Asia
- Israel-Iran Conflict Spurs China to Reconsider Russian Gas Pipeline - WSJ
- Disarray At European Commission As Greenwashing Flip-Flop Triggers Doubts About Its Grip - Politico
- Inside The Air Policing Mission Keeping NATO Leaders Safe - Politico
- Strait Of Hormuz GPS Jamming Remains Major Security Issue, Tanker CEO Says - CNBC
- Trump Threatens to Double Spanish Tariffs Over NATO Spending - Yahoo
- Zohran Mamdani Is The Democratic Nominee For Mayor. Unlike Most Years, That Doesn’t Mean He’s A Shoo-In In The General. – City & State
- Jeff Bezos Changes Venice Wedding Plans Amid Protests - Newsweek
Policy and Politics
Bessent Predicts Republicans Reach SALT Truce in 48 Hours
Treasury Department Secretary Scott Bessent said the Senate is on track to vote Friday on the GOP megabill to enact President Trump’s agenda, and that the president would be fully involved in helping gather support for the bill in the final days. Bessent spoke to reporters after meeting with GOP senators in the Capitol as Republican leaders race to reach consensus on key provisions.
He predicted that Senate and House Republicans would reach a deal on raising the cap on state and local tax deductions, a major sticking point, in the next 24 to 48 hours. “I just had a very successful lunch meeting with the senators, I think that we are, hopefully, on track for a vote this Friday,” he said. Bessent predicted the legislation would also pass the House quickly and make it to Trump’s desk by the July 4 deadline the president set for the bill.
House Committee on Transportation and Infrastructure Considers PERMIT Act
The National Association of Manufacturers is encouraged committee members to approver The Promoting Efficient Review for Modern Infrastructure Today (PERMIT) Act. The Act adopts the NAM’s key recommendations to the Committee for modernization of regulatory authorities under the Clean Water Act—reforms that are critical to manufacturers’ ability to build, expand and hire in America,” NAM Managing Vice President of Policy Charles Crain told the committee ahead of a Wednesday markup of the bill. “These include proposals to increase certainty for permittees and clarify the scope of the CWA.”
The permitting process for manufacturers under the Clean Water Act is unnecessarily long and onerous, jeopardizing continued American leadership in manufacturing. In February, Nucor Corporation Executive Vice President of Sheet Products Noah Hanners told the committee members that “cumbersome and overreaching permitting regulations are holding back progress and hurting our nation’s competitiveness.” CWA permit reform should be undertaken as part of a broader effort to streamline and speed up the regulatory permitting process writ large. “If we want to grow America’s economy, we need to fix this broken system,” Crain concluded.
State Launches 2025 Regional Economic Development Council Initiative
Governor Kathy Hochul has announced the launch of the 2025 REDC Initiative. Since 2011, the state’s 10 Regional Councils have enlisted a bottom-up approach to economic development, evaluating and supporting projects that advance strategic regional and statewide priorities.
Up to $60 million in Regional Council Capital Funds will be made available in the 2025 Consolidated Funding Application (CFA) to facilitate projects that advance each region’s strategic plan and state priorities. The $60 million available includes up to $8 million in capital funding for tourism-related projects, previously offered through the Market New York Capital Grant program, intended to support capital investments that will strengthen the state’s tourism initiatives.
Political Headlines
- Mamdani Stuns Cuomo: 5 Takeaways From The NYC Mayoral Primary – The Hill
- $30 Minimum Wage Has L.A. Hotel Owners in Revolt - WSJ
- RFK Jr. Says US Won’t Donate To Global Vaccine Effort - Politico
- Trump Net Approval Hits New Low In Economist/YouGov Poll – The Hill
- Scott Brown launches campaign for Senate in New Hampshire - Politico
- RFK Jr.’s New Vaccine Advisers to Re-Examine Shot Advice for Children - CNBC
- Judge Rules Trump Can’t Eliminate Federal Workers’ Union Bargaining – The Hill
- Alvin Bragg Wins Democratic Nod In Manhattan DA Reelection Bid – City & State
- Trump Tracker: Keep Tabs On The Latest Announcements And Executive Orders - WSJ
Health and Wellness
AI Could Actually Boost Your Workers’ Mental Health. Here’s How
New research into AI’s impact on workers’ wellbeing offers a startling conclusion that refutes critics of the AI’s impact on the workplace, and counters recent reports suggesting the new technology is bad for people’s critical thinking abilities. Data from a large study suggest that though AI is relatively new, and the evidence is quite early, its use in the workplace hasn’t harmed people’s mental health or negatively affected their job satisfaction. Quite the opposite, in fact. The study found that letting your workers use AI may actually slightly benefit their health—particularly among less well-educated staff.
The research, published this week, compared workers in occupations with high exposure to AI to those in less AI-exposed jobs, science news site Phys.org reports. There are a few wrinkles in the conclusions, and the authors explicitly warned that it’s very early to draw long-term conclusions about the impact of AI, but the results are definitely interesting food for thought for any company leader who’s been wary, thus far, of rolling out AI tools in the office or factory floor. Essentially, the researchers found there was no meaningful average effect of AI use at work correlating to job or life satisfaction or mental health. When workers were asked to self-rate the impact of AI on themselves, the data showed small improvements in physical health, and satisfaction with their overall health.
Industry News
Why Factories Are Having Trouble Filling Nearly 400,000 Open Jobs
The pool of blue-collar workers who are able and willing to perform tasks on a factory floor in the United States is shrinking. As baby boomers retire, few young people are lining up to take their place. About 400,000 manufacturing jobs are currently unfilled, according to the Bureau of Labor Statistics Difficulty attracting and retaining a quality work force has been consistently cited as a “top primary challenge” by American manufacturers since 2017, said Victoria Bloom, the chief economist at the National Association of Manufacturers, which produces a quarterly survey. But the scarcity of skilled blue-collar workers remains a long-term problem, according to Ron Hetrick, an economist with Lightcast, a company that provides labor data to universities and industry. The hiring challenges faced by American factories are multifaceted.
Attracting motivated young people to manufacturing careers is also a challenge when high school guidance counselors are still judged by how many students go on to college.
The president’s crackdown on immigration, which includes attempts to revoke deportation protections for migrants from troubled countries, may eliminate workers who could have filled those jobs.
Many Americans aren’t interested in factory jobs because they often do not pay enough to lure workers away from service jobs that may have more flexible schedules or more comfortable working environments.
For some companies, remaining globally competitive involves the use of sophisticated equipment that requires employees to have extensive training and familiarity with software. And employers cannot simply hire people right out of high school without providing specialized training programs to bring them up to speed. That wasn’t the case in the heyday of American manufacturing.
IBM's z17 AI-Optimized Mainframe Is Officially On Offer
IBM's newest mainframe generation, the z17, is now generally available. Announced in April this year, the mainframe has been engineered specifically to support AI capabilities and is the result of five years of development. The z17 features a second-generation on-chip AI accelerator built on the IBM Telum II processor, and can process 50 percent more AI inference operations per day than its predecessor, the z16. The z17 is made at IBM’s Poughkeepsie site.
As a result, the company says the new mainframe features increased frequency and compute capacity alongside a 40 percent growth in cache, enabling more than 450 billion inferencing operations in a day and a one-millisecond response time. The z17 will also feature the 32-core IBM Spyre accelerator - due to launch in Q4 - to provide additional AI compute capabilities alongside the Telum II.
Read more at Data Center Dynamics
Gas Prices Are Down for Summer Driving Season Despite Middle East Turmoil
The national average for a gallon of regular gasoline, $3.21, is about 23 cents cheaper than this time last year, according to data from the U.S. Energy Information Administration. Analysts say plentiful supply is expected to keep prices down in the coming months even with turmoil in the Middle East. Oil prices on Tuesday were lower than before Israel and Iran’s conflict began. The Brent price fell Tuesday to $67.14 a barrel after the two sides continued to exchange fire despite a U.S.-brokered cease-fire. Later in the day, there were signs the cease-fire might be holding.
Patrick De Haan, head of petroleum analysis at GasBuddy, expects gasoline prices to fall in the coming days and hold between $3 and $3.20 for the summer, assuming Israel’s conflict with Iran doesn’t re-escalate. Reduced prices would be a boon for consumers during the warmer months when Americans drive more. Low energy prices so far this year have already contributed to the economy’s resilience and helped keep inflation in check.
Shell in Early Talks to Acquire Rival BP
Shell is holding early stage talks to acquire rival BP in what would be the largest oil deal in a generation, people familiar with the matter said. Talks between company representatives are active, the people said, and BP is considering the approach carefully. Acquiring BP would put Shell on firmer footing to challenge larger competitors such as Exxon Mobil XOM 0.44%increase; green up pointing triangle and Chevron. It would be a landmark combination of two so-called supermajor oil companies, a group of multinational behemoths that dominate the production of the world’s most important energy sources.
Shell comes into the talks operating from a position of strength, with its stock sharply outperforming BP in recent years. Shell, which like BP is based in the U.K. but has operations around the world, has a market value of more than $200 billion. BP has been the laggard among major oil companies after an ill-fated push away from fossil fuels into renewable energy. It has also suffered years of management upheaval and operational disasters.
Northrop Exec: Industry Can Create Surge Capacity—If It’s in Contracts
The Pentagon can get the weapons production surge capacity it wants, but it has to be willing to pay companies to create it, according to a top executive with Northrop Grumman, which builds the B-21 bomber. Tom Jones, Northrop Grumman’s corporate vice president and president of the company’s aeronautics sector, said the Pentagon has to make any surge capacity requirement an allowable cost on contracts. Lacking that compensation, it would be hard to justify, he said June 24 at a Center for a New American Security panel on the future of the defense industrial base.
“The fastest way” to add surge capacity—whether for munitions, aircraft, or other items—“would be to have spare factory space sitting around that you could go into and utilize,” he said. But “the way the system is set up right now, none of that is allowable cost. So, for a contractor to build a spare building on speculation that someday it might be needed, it actually ties up a bunch of cash [and] you aren’t actually able to recoup the cost of that. The question is not academic—funds to surge production are being debated in the reconciliation bill before Congress, which would add $4.5 billion to the B-21 program for what lawmakers called “expansion of the production capacity” of the aircraft, “including tooling and expansion of the supplier base.”
Read more at Air & Space Forces
This Startup Wants Its Robots To Operate On Your Eyeballs
Cataract surgery is one of the world’s most common medical procedures, with more than 4 million of them done each year in the United States alone, but there simply aren’t enough doctors available to meet the demand for everyone who needs the surgery. Enter robotics. An Israeli startup is betting that robots can ultimately do the procedure better and cheaper than human doctors.
ForSight Robotics on Tuesday said it had raised $125 million led by Eclipse Ventures to expand its robotic platform, called Oryom, which it says is the world’s first for cataracts and other eye diseases. ForSight has been testing its robot on pig eyes, and plans to complete its first full robotic surgery on a human patient later this year. It’s targeting the U.S. market and is in early conversations with the FDA. While ForSight’s robots would be the first for cataracts, robotic surgery has become increasingly commonplace since $185 billion (market cap) Intuitive Surgical received FDA approval for its Da Vinci robots 25 years ago.
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Tesla’s European Car Sales Nosedive For Fifth Month As Customers Switch To Chinese EVs
Tesla new car sales in Europe fell for a fifth straight month in May, according to data from the European Automobile Manufacturers Association, or ACEA, as customers pivot to cheaper Chinese electric vehicles. Data published Wednesday by ACEA found that Tesla’s car sales in the European Union, Britain and the European Free Trade Association fell to 13,863 units in May, down 27.9% year on year. Tesla’s European market share also dropped to 1.2% from 1.8% in May 2024.
Tesla continues to battle rising competition from traditional automakers, as well as Chinese players. Auto giant BYD, for instance, registered nearly as many vehicles as Tesla in May after outselling Musk’s company for the first time in April. Chinese manufacturers maintained their strong momentum in Europe’s new car market in May despite European Union tariffs on Beijing’s EVs. Chinese automakers sold 65,808 units last month and more than doubled their market share in the region to 5.9%, according to data published Tuesday by JATO Dynamics.
Stellantis Has Started Review Of Long-Term Strategic Plans, Says New CEO
Stellantis' has begun reviewing its long-term strategic plan, new Chief Executive Antonio Filosa told staff on Wednesday, in his first public appearance since officially taking over as head of world's No. 4 automaker. "We have already started looking at our long-term strategic plan, which we will share when we are ready," Filosa said in a video call from Turin in Italy, and which was shared by the company with reporters.
The current "Dare forward 2030" long-term plan, presented in March 2022 by former CEO Carlos Tavares, aimed to double net sales by the end of the decade and maintain double-digit operating margins. However, Stellantis faced major commercial and operational difficulties in the United States and Europe last year, which forced it to abandon its annual targets, and eventually led to Tavares' departure. The current plan also aims for 100% of its sales in Europe and 50% in the United States to come from electric vehicles, with sales in new markets outside of those regions to increase to more than 25% of group sales.