Our next guest is a Washington insider who's been tracking the Fed for years. So, let's get his take on what's happening. Joseph Leavone's counselor to Treasury Secretary Scott Besson.I said, "Oh, I'm so glad you're on today, Joe." Uh, I'm glad to be with you, Kelly, and glad to be with you, Brian. We're we're good friends. We go back a long time.Yes. Yes. Oh, we we go back.So, I'm I'm like, tell me, give me the spin. Is there spin on this, Joe, or or No, there's no spin. I mean, President Trump is uh he is ...

Fiscal Policy & Legislation - Senate passed the Trump mega bill, heading to the House with potential votes as soon as tomorrow, aiming for the president's desk by July 4th [2] - Last-minute changes to the bill include the potential removal of the excise tax on solar and wind [3] - The combination of the deficit impact from the budget bill and tariffs appears to be neutral, according to the CBO [15][16] Bond Market & Interest Rates - The 10-year Treasury yield at 427 basis points is viewed positively, suggesting growth without hyperinflation or uncontrolled deficit [12][15] - Goldman Sachs raises its 2025 Fed rate cut forecast to three from one (September, October, and December) due to smaller-than-expected tariff effects [16] - A September 18th Fed rate cut is anticipated, driven by the expectation that inflation will not spike in June and July [20] Currency & International Markets - The weakness in the dollar is a significant trend, powering investor portfolios forward through international stock exposure [6] - International stocks have been outperforming US stocks, with a 126 percentage points gap through Friday, marking the widest gap in 24 years [8] - Even stripping out the effect of the weak US dollar, international stocks are still up 11% year-to-date, driven by earnings growth in regions like South Korea and Europe [9] Company Specific - General Motors (GM) is being re-evaluated due to potential adjustments to trade rules, with the market possibly anticipating higher earnings and a higher multiple [13]

Investment Rating - The report suggests a dovish outlook for the Federal Reserve, indicating potential rate cuts in September due to weak consumer spending and subdued core PCE inflation [1][8]. Core Insights - Consumer spending has shown signs of persistent weakness, particularly in services, with a nominal increase of only 0.1% MoM and flat real terms, leading to an overall decline in personal spending [5][7]. - Core PCE inflation increased by 0.179% MoM, slightly above expectations, but still subdued enough to support the case for rate cuts [4][8]. - The report highlights a significant decline in travel-related spending, particularly in air travel and hotel accommodations, which have seen declines every month this year [7][8]. Summary by Sections Consumer Spending - Personal spending fell by 0.1% MoM in nominal terms and 0.3% in real terms, with goods spending declining by 0.8% MoM [5]. - Services spending showed unexpected weakness, with a nominal increase of only 0.1% MoM and flat in real terms, indicating a broader trend of reduced consumer demand [5][7]. Inflation Metrics - Core PCE inflation was reported at 0.179% MoM, slightly stronger than consensus but still indicative of a soft inflation environment [4][8]. - The report suggests that weak consumer demand limits the ability of firms to pass through tariff price increases, reducing the risk of broad-based inflation [8]. Employment Implications - The report indicates that weaker consumer demand could lead to softer hiring, raising downside risks to the Federal Reserve's employment mandate [8].