Morning Roundup

By Mark Masterson on July 15, 2025

Good morning,

Below are the news items moving markets today:

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Executive Summary:

Happy Monday!

After a busy week – let’s catch up on a few important points….

First, here is what is on deck this week….

• June CPI Inflation data – Tuesday
• June PPI Inflation data – Wednesday
• June Retail Sales data – Thursday
• July MI Consumer Sentiment data – Friday
• Total of 12 Fed speaker events this week
• The banks kick off earnings season as well.

Inflation today came in at…..

We’ll see if it influences Powell and the Fed moving forward.  One thing we know – political pressure on Powell will continue….

• Friday afternoon, FHFA Director Pulte claimed Powell considering resigning, citing unspecified “reports.”
• Followed comments from OMB Director Vought on CNBC focusing criticism on Fed’s over-budget headquarters renovation.
• And while Trump has said he would not fire Powell, economic advisor Hassett said Trump can fire Powell for cause, and that could depend on findings regarding the HQ project (Axios).
• Note, however, removal of Powell may not pave the way for sharp rate cuts Trump seeks; only two Fed officials in June projected 75bp of cuts this year, and the median longer-run projection was only at 3.0%.
• Trump’s economic adviser Hassett is increasingly emerging as top Fed chair contender (Washington Post)
• Pressure on Powell to resign ramps up as Fed Chair contenders slam bank over $2.5B renovation (Yahoo Finance)
• Powell makes formal request for Fed’s inspector general to review $2.5B building renovation (Bloomberg)

Powell may or may not listen to Trump’s threats.  It is also becoming clear that investors and the market are not listening either.  In fact, the market barely reacts to Trump’s tariff threats any longer.

It is believed by investors that Trump will not follow through.  (TACO – or Trump Always Chickens Out)

You can see it in the fund flows.  Investors just recorded the biggest 3-month rise in risk appetite on record, according to Bank of America’s July fund manager survey.  This kicked off once Trump put in the 90 day pause and the TACO trade was born….

• BofA survey shows funds pile into risky assets, betting against recession and forecasting stock strength (Bloomberg, Reuters)

BofA 7 15 25

Trump is once again talking tough on trade with Europe.  Yet, the TACO dynamic was supported by latest remarks on EU tariffs from US President Trump Monday that while his tariff letters have set terms of bilateral deals, added that “we’re always open to talk” (Bloomberg).

Interesting that President Trump knows who the market “whisperer” is in his administration:

• Trump: The market has become calm and nice because of US Treasury Secretary Bessent…. I go on TV and rile the market.

The latest on trade and tariffs….

• Trade/Tariffs:
  • EU eyes €72B in US goods for trade countermeasures, including aircraft and bourbon (Politico, FT)
  • EU ministers seek tariff resolution to avoid transatlantic trade war with US (Reuters, Bloomberg, Politico)
  • Trump uses unpredictable trade tactics, risks undermining US positions and creating business uncertainty (link)
  • US slaps 17% duty on Mexican tomatoes after trade talks fail, aiming to boost domestic production (Bloomberg)
  • Japanese PM to meet US Treasury Secretary, EU leaders to forge trade alliance amid US tariff risks (Reuters)
  • US absence, Trump tariffs, BRICS tensions loom over G20 finance meeting in Durban (Reuters)

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Articles of Interest:

• Central banks:
  • Powell seeks review of Fed renovation costs amid Trump administration criticism, defends project scope (Reuters)
  • Trump’s push for 1% Fed rate could backfire, reignite inflation and undermine independence (Reuters)
  • Trump’s tariff threat complicates ECB outlook, rate cut pause expected but September delay likely (Reuters)
• Economy:
  • US inflation data, spurred by Trump tariffs, may test Fed’s resolve this summer (Reuters, Reuters)
  • Trump’s tariffs and market highs a dangerous disconnect (Axios)
  • Trump-era tax law shifts burden, favoring how you earn money, where you live, and who you are (Bloomberg)
• Markets:
  • Japan’s 10-year yield surges to a high not seen since the 2008 financial crisis (link, FT, Reuters, Bloomberg)
  • Weaker US dollar threatens European earnings, currency shifts become key focus this reporting season (Bloomberg)
  • High-yield bond trading volume surges to record levels amid volatility, electronic trading boom (Bloomberg)
  • US dollar weakens, hitting multinational earnings, but travel remains strong (link)
• Geopolitics:
  • Trump urged Ukraine to strike Moscow, asked Zelenskyy about hitting Russia, sources say (FT)
  • Trump ties Ukraine aid to “America First,” privately doubts Ukraine war success (Politico)
  • US threatens Russia with severe tariffs, sanctions over Ukraine war, escalating tensions (BBC, FT, NY Times)
  • Taiwan prepares civilians for potential Chinese invasion, bringing military drills home (FT)
• Washington:
  • Trump administration reduces planned federal worker layoffs after buyouts, retirements (Reuters)
  • Supreme Court allows Trump administration to proceed with Education Department dismantling (Reuters)

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Charts of the day:

Does anyone else see this chart below and become slightly depressed?

Let’s face it, no matter who or which party is in office – one thing remains the same – government spending will rise.

John Arnold 7 14 25

If the past relationship holds true – commodities should catch up to the recent gold price surge.

Commodities in black below typically follow with a lag…

7 15 25

Updating a few charts.

Looks like Bitcoin finally decided it was time to break out of that resistance zone that had stopped every rally dating back to 2021….

The US dollar is holding that major support at the bottom of the rising channel…..

This is a reasonable place for the dollar to bounce.  If it breaks down from here, watch out below…

The dollar has been up the past 8 days and still has not made much progress…

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Quote of the day:

“The first rule of a happy life is low expectations.”

— Charlie Munger