Market Expectations & Potential Impacts - The market anticipates a US CPI data release at 8:30 am ET [1] - The expected CPI is 2.8% [1] - A CPI of 2.8% or less is perceived to indicate a near 100% chance of Federal Reserve rate cuts [1] - Lower CPI (less than 2.8%) is expected to lead to increased market liquidity and a market pump [1] - A CPI of 2.9% or higher is anticipated to cause a sharp short-term market dump [1] Risk Management - High volatility is expected in Bitcoin ($BTC) and the broader cryptocurrency market [1] - The report advises caution against using high leverage [1]

Summary of Key Points from the Conference Call Industry Overview - The report discusses the performance of the US equities market, particularly focusing on the S&P 500, which gained 2.4% this week, closing near all-time highs (ATH) [4][19] - Key sectors mentioned include Real Estate, Technology, and Industrials, with notable performance variations among them [4][54] Core Insights and Arguments - **Market Performance**: The S&P 500's recent performance is attributed to a constructive earnings season and a changing outlook on the US economy [4][19] - **Sector Performance**: - **Top Performers**: Global Rare Earths (+14.64% WoW, +167.35% YTD), Global Copper (+6.90% WoW, +15.01% YTD), and Megacap Tech (+5.15% WoW, +16.49% YTD) [3][4] - **Bottom Performers**: Obesity Drugs (-5.83% WoW, -12.25% YTD), Nat Gas (-2.22% WoW, +0.77% YTD), and Secular Growth (-1.51% WoW, +9.89% YTD) [3][4] - **Investor Behavior**: Hedge Funds (HFs) net sold US equities at the fastest pace in four months, primarily in Macro Products, while Long Only (LO) investors were net buyers [4][19][10] - **Gold Market**: A surprise report on US import tariffs on gold bars led to gold futures reaching new all-time highs, with a notable increase in open interest and ETF holdings [4][24] Additional Important Insights - **Earnings Season**: 60% of companies exceeded earnings per share (EPS) expectations by more than one standard deviation, indicating stronger-than-expected performance [20] - **Volatility Trends**: The VIX index saw a significant drop, reflecting a more bullish market sentiment [4][37] - **Economic Outlook**: The economics team anticipates inflation data to reflect tariff impacts in the coming months, potentially leading to a slowdown in growth [44][45] - **Sector-Specific Insights**: - **Industrials**: Housing stocks performed well, driven by expectations of a dovish Federal Reserve and better-than-expected earnings [52] - **Consumer Sector**: Price reactions to earnings were weak, indicating a potential rotation into housing and technology sectors [53] - **Financials**: Banks are seen as a source of funds amidst market derisking, with a focus on rate sensitivity profiles as a potential rate-cutting regime approaches [54] Conclusion - The report highlights a complex interplay of sector performances, investor behaviors, and macroeconomic factors influencing the US equities market. The insights provided can guide investment strategies and risk assessments moving forward.

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Core Insights - The upcoming week will feature significant economic indicators including Consumer Price Index (CPI), Producer Price Index (PPI), retail sales data, and consumer sentiment metrics [1][2] Economic Indicators - CPI and PPI are critical measures that will provide insights into inflation trends and pricing pressures within the economy [1][2] - Retail sales figures will be closely monitored as they reflect consumer spending habits, which are vital for economic growth [1][2] - Consumer sentiment data will offer an understanding of consumer confidence, influencing spending and investment decisions [1][2]

Summary of Key Points from the FOMC Meeting and Economic Outlook Industry Overview - **Federal Reserve and Economic Policy**: The July FOMC meeting indicated a hawkish stance regarding interest rates and inflation management, emphasizing the importance of the unemployment rate as a key indicator of economic health. Core Insights and Arguments - **Hawkish Tone of FOMC**: The July FOMC meeting raised the bar for potential rate cuts later in the year, with Chair Powell highlighting persistent inflation risks and the unemployment rate as a more accurate measure of maximum employment [6][8][37]. - **Tariff-Induced Inflation**: Powell acknowledged initial evidence of inflation due to tariffs, but noted uncertainty regarding the pace of tariff pass-through to consumer prices, indicating that the Fed remains data-dependent [6][18][22]. - **Labor Market Dynamics**: Powell stated that the Fed could still meet its maximum employment mandate despite slow payroll growth, as long as the unemployment rate remains low. This suggests a focus on the unemployment rate rather than payroll growth as a key metric [6][24][30][32]. - **Inflation Expectations**: The Fed's inflation target remains above 2%, with core PCE prices rising by 2.7% over the past year. The Fed expects inflation to remain firm in the coming months, with potential upward revisions to inflation forecasts [18][23][37]. - **Economic Growth Assessment**: The FOMC downgraded its growth assessment, indicating that economic activity moderated in the first half of the year, which could imply a dovish tilt in future policy decisions [10][12]. Important but Overlooked Content - **Dissenting Opinions**: The presence of dissenting opinions from Governors Bowman and Waller allowed Powell to adopt a more hawkish tone, focusing on the consensus view rather than reflecting a range of opinions [16][38]. - **Market Reactions and Predictions**: The market-implied probability of rate cuts has been influenced by upcoming employment and inflation data, with expectations that the Fed will remain on hold in 2025 unless significant economic changes occur [39][41][62]. - **Trade Recommendations**: Analysts suggest various trading strategies, including maintaining long positions in specific Treasury securities and monitoring the USD outlook, which is expected to decline unless labor market data surprises positively [66][62]. Conclusion - The FOMC's current stance reflects a cautious approach to monetary policy, with a focus on inflation management and labor market stability. The upcoming economic data will be crucial in determining the Fed's future actions regarding interest rates and overall economic strategy.

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Market Analysis & Prediction - Bitcoin is trading sideways between $116,000 and $120,000, indicating strong bull control [1] - The consolidation phase could trigger a breakout towards $175,000-$200,000 in the next 5-6 months, similar to patterns observed in 2017 and 2021 [1] - Short-term volatility is likely, but Bitcoin and U S markets remain extremely bullish for the next 6-9 months, with any panic potentially representing a major buying opportunity [2] Technical Indicators - RSI has reached 71%, indicating overbought territory, but could reach 85-90 levels in parabolic phases [2] - MACD is still strong, indicating continued momentum [3] - Resistance is projected at $125,000 based on Head and Shoulders pattern target [3] - Support levels are identified at $116,000 and $110,000 [3] Macroeconomic Factors - The "Big Beautiful Bill" signed by Trump is expected to inject massive liquidity into the market [4] - Markets have absorbed multiple war-related shocks and are still at All-Time Highs (ATH) [4] - Anticipation of 3-4 rate cuts of 25 basis points each (0 25%) over the next 6 FOMC meetings [4] - Global M2 money supply is rising again [4]

Core Viewpoint - Unity Bancorp, Inc. reported a record net income of $16.5 million for Q2 2025, reflecting strong financial performance driven by one-time gains and stable credit quality [1][2][3] Financial Performance - Net income for Q2 2025 was $16.5 million, or $1.61 per diluted share, compared to $11.6 million, or $1.13 per diluted share in Q1 2025 [1] - For the first half of 2025, net income reached $28.1 million, or $2.74 per diluted share, up from $19.0 million, or $1.86 per diluted share in the same period of 2024 [1] - The increase in net income was partially due to one-time pre-tax gains of $3.5 million from the sale of securities and a $2.0 million release for credit losses on securities [1] Return on Assets and Equity - The company achieved a return on assets (ROA) of 2.51% and a return on equity (ROE) of 21.15% for the quarter [2] - On a non-GAAP basis, net income was $12.2 million, or $1.20 per diluted share, with a ROA of 1.86% and a ROE of 15.70% [4] Lending and Deposit Growth - Loan balances increased by $37.5 million in Q2 2025, representing a 1.6% increase from Q1 2025 and a 5.4% increase from year-end [5] - Total deposits grew by $12.0 million, or 0.6% from Q1 2025, and 4.1% since year-end [5] - Credit quality remained stable, with nonaccrual assets as a percentage of total assets declining to 0.54% [5] Future Outlook - The company is optimistic about future growth due to strong loan demand and anticipated economic growth, supported by recent inflation data indicating price stabilization [6]

V i e w p o i n t | 11 Jul 2025 09:28:41 ET │ 11 pages US Economics What the Fed Said – Will tariff-related inflation show up? +1-212-816-0325 andrew.hollenhorst@citi.com Veronica Clark AC +1-212-816-8830 veronica1.clark@citi.com Gisela Young AC +1-212-816-8349 gisela.young@citi.com See Appendix A-1 for Analyst Certification, Important Disclosures and Research Analyst Affiliations. Citi Research is a division of Citigroup Global Markets Inc. (the "Firm"), which does and seeks to do business with companies c ...