Fiscal Policy & Economic Growth - The analysis suggests tariffs are running at an annual rate between $400 billion and $500 billion, potentially improving the deficit, but real GDP growth is considered the key to significantly reducing the deficit as a percentage of GDP [1] - The report anticipates real GDP growth will surprise on the high side of expectations later in the year and into 2026, driven by innovation platforms like robotics, energy storage, AI, multiomic sequencing, and blockchain technology, all catalyzed by AI [1] - The analysis highlights deregulation, particularly in crypto, AI, and nuclear energy, as a significant factor for economic growth, with tax changes encouraging manufacturing and innovation through accelerated depreciation schedules and full expensing of equipment, R&D, and software [1] Inflation & Monetary Policy - The report indicates that while inflation may seem stuck in the 2% to 3% range, innovation-driven productivity gains could lead to deflation in the coming years [2] - The analysis points out that M2 money supply growth has significantly dropped compared to the COVID boom, and the velocity of money is declining, potentially diffusing inflationary pressures [2] - The yield curve, measured by the two-year Treasury yield relative to the three-month Treasury yield, indicates tight monetary policy, which is expected to have disinflationary or deflationary effects [3] - True inflation CPI is reported at 19%, even with tariffs factored in, and consumer inflation expectations are expected to decline [3] Market Indicators & Investment Strategy - The analysis notes that manufacturing has been contracting for the last three years, and services are not in great shape, signaling potential economic concerns [4] - The report highlights that AI-powered capital spending is increasing, supported by new tax rules, while the trade deficit is being addressed [5] - The analysis observes that pending home sales are deteriorating, and new home inventory is high, potentially leading to price cuts and impacting the CPI [5] - The report suggests that the return on investment in the US is expected to increase due to innovation, tax laws, and deregulation, potentially strengthening the dollar [5] - The analysis notes that corporate profits are healthy, but quality of earnings and harnessing new technologies will be crucial for future growth [5] - The report observes that commodity prices are going nowhere, and gold is breaking out to all-time highs relative to metals, possibly signaling deflationary concerns [5]

Trade Balance & GDP Growth - The trade deficit widened to $783 billion from $602 billion [1] - Imports increased by 59%, while exports increased by 03% [1] - Increased imports may negatively impact GDP growth outlook for the third quarter [2] - The increase in imports may be due to companies stocking up before tariffs were reimposed in August [2] - August trade numbers may differ if the import surge reverses [3] Labor Market - Jobless claims are now at 37000, slightly higher than the anticipated 23000 [1] - Continuing claims are at 194 million, down from 10000944 [1] - ADP reported only 54000 jobs created [2]

Labor Market & Economic Growth - Jolt job openings came in below estimates at just below 72 million versus 74 million expected [1] - The current labor market rate is at the same level as the fourth quarter of 2019, when the Trump economy generated nearly 35% real GDP growth [2] - Capital spending grew over 15% in the first half of the year [3] - Atlanta Fed GDP is forecasting 35% GDP growth after a 3% plus gain in the last quarter [4] - When capital spending trends improve, hiring inevitably follows [6] Tariffs & Fiscal Policy - Tariff revenue could reach $300 billion this year, potentially adding 1% to GDP, leading to a possible 5% growth [9] - The revenues from tariffs are running above a $300 billion annualized rate, potentially hitting $500 billion [10] - The administration believes the courts will rule in favor of the president's ability and authority to implement tariffs [17] - Goods prices within the CPI are up 07% annualized since record tariff collection began in April [20][21] Monetary Policy & Federal Reserve - The economy needs interest rates in line with what are considered neutral, and even the highest dot on the Fed dot plot indicates rates are restrictive [8] - The central tendency of the FOMC's forecast is about 275% to 3%, maybe a shade higher, which is about 150 basis points higher than current rates [12] - There is a need for a wholesale re-evaluation of how the forecast process is done at the Fed, with more robust macroeconomic discussions and varied viewpoints [14][15]

Real Gross Domestic Product (GDP)Real Final Sales to Private Domestic PurchasersPersonal Consumption Expenditures (PCE) Price IndexBrought onchain and powered by the Chainlink data standard. https://t.co/uyXxyfgUUQHoward Lutnick (@howardlutnick):The numbers are in: GDP growth has surged by 3.3%. And starting now, @CommerceGov has put America’s economic data on the blockchain for the first time ever.Under President Trump, the economy is strong, our workers are winning, and America is leading in crypto & econ ...

🚨 BREAKING 🚨🇺🇸 US REVISES Q2 GDP GROWTH UP TO 3.3%, THE BEST QUARTER SINCE Q3 2023.BULLISH FOR THE MARKETS !! ...

JUST IN: 🇺🇸 US revises Q2 GDP growth up to 3.3%, the best quarter since Q3 2023. https://t.co/2atSXfYtR5 ...

We're going to go right now to Jay Powell has become speaking and delivering this speech. >> In my remarks today, I will first address the current economic situation in the near term outlook for monetary policy. I will then turn to the results of our second public review of our monetary policy framework, as captured in the revised Statement on Longer Run Goals and Monetary Policy Strategy that we released today.When I appeared at this podium one year ago, the economy was at an inflection point. Our policy r ...

Investment Rating - The report maintains an equal-weight rating on equities, overweight in core fixed income, and underweight in other fixed income [3][4]. Core Insights - The US labor market is showing signs of downside risks, with employment growth moderating faster than expected, leading to a forecasted decline in real GDP growth from 2.5% in 2024 to 1.0% in 2025 [1][7]. - Global growth is expected to decrease from 3.5% in 2024 to 2.6% in 2025, influenced by tariff impacts and trade tensions [1][7]. - The report suggests a focus on quality assets amid growth and tariff risks, favoring quality cyclical stocks and investment-grade credit over high-yield credit [3][5]. Economic Forecasts - The US GDP growth is projected at 1.0% for 2025 and 1.1% for 2026, with inflation expected to be 3.0% in 2025 and 2.5% in 2026 [9]. - The Euro Area GDP growth is forecasted at 1.0% for 2025 and 1.1% for 2026, with inflation at 2.1% and 1.8% respectively [9]. - Japan's GDP growth is expected to be 0.4% in 2025 and 0.6% in 2026, with inflation at 2.1% and 1.7% [9]. - Emerging Markets (EM) are projected to grow at 3.8% in 2025 and 4.4% in 2026, with inflation at 1.6% and 1.9% [9]. Sector Recommendations - In the US, the report recommends positioning in quality cyclicals, large caps, and defensives with lower leverage and cheaper valuations [5]. - For Japan, the focus is on domestic reflation and corporate reform beneficiaries, as well as defense-related spending [5]. - In Europe, key sectors for overweight positions include defense, banks, software, telecoms, and diversified financials [5]. - In Emerging Markets, the preference is for financials and profitability leaders, particularly domestic-focused businesses [5]. Market Dynamics - The report indicates that US markets remain unmatched in size and liquidity, but rising policy uncertainty may pressure the dollar as foreign investors increase FX-hedging ratios [3][12]. - The anticipated Fed rate cuts in 2026 are expected to influence Treasury yields, with 10-year Treasury yields projected to reach 4.00% by the end of 2025 [12][13].

RT Archie Hall (@ArchieHall)My latest in @TheEconomist: on America's data-centre boom.Vast short-run impact on GDP growth:— Accounts for ~1/6th of growth over the past year— And ~1/2 of growth over the past six monthsBut: so far still much smaller than the 1990s dotcom buildout.And... https://t.co/jcFqg94s8u ...

Summary of Key Points from the Conference Call Industry Overview - **Global Economy**: The conference focused on the global economic outlook, emphasizing the importance of macroeconomic indicators in understanding economic trends [1][4]. Core Economic Insights - **GDP Growth Projections**: - The US and China are experiencing the sharpest growth slowdowns among the regions covered, with the US projected to grow at 1.0% in 2025 and China at 4.2% [5][8]. - Euro Area growth is expected to be 0.9% in 2025, while Japan is forecasted at 0.5% [8]. - Selected emerging markets like India are projected to grow at 6.5% [8]. - **Inflation Trends**: - A divergence in global disinflation is noted, with the US experiencing a short-term tariff boost to inflation, but a downward trend is expected to continue thereafter [9][11]. - The Federal Reserve is anticipated to maintain a pause in interest rate changes through 2025, while other developed market central banks are expected to ease [11][14]. - **Tariff Impacts**: - A 30% tariff rate on imports from China is currently in effect, which is expected to boost inflation over the summer [20][25]. - The effective tax rate has decreased to 13% since "Liberation Day" [22]. Employment and Labor Market - **Job Market Pressures**: - The job market remains under pressure, with payroll breakevens expected to drop to 70,000 per month in 2025 and 2026 due to rising deportations [29][66]. - Manufacturing production declines have been accompanied by falling payrolls [50]. Regional Economic Insights - **China's Economic Conditions**: - Persistent deflation is expected, with entrenched PPI deflation and low CPI inflation continuing [60][64]. - Consumption improvements are likely to be driven by policy measures, and the housing supply-demand balance has improved significantly in tier-1 cities [69][64]. - **Japan's Economic Outlook**: - Japan's nominal GDP is on a gradual growth trajectory, with base wage payments trending around 3% [85][87]. - The economy is not expected to experience runaway inflation or a return to deflation [88]. - **Euro Area Challenges**: - The Euro Area is projected to see GDP slowing year-on-year until Q1 2026, influenced by various shocks [52]. - The ECB is expected to cut rates to 1.5% by the end of the year [44]. Additional Insights - **Global Supply Chain Dynamics**: - China remains central in the global supply chain, with a stable global export share despite a declining share in the US market [72][74]. - The diversification of China's supply chain with new export destinations is noted, particularly in green products [77]. - **Political Uncertainty**: - Political uncertainty in Japan is highlighted, particularly regarding the outcomes of the 2024 Lower House elections [88]. This summary encapsulates the key points discussed in the conference call, providing insights into the global economic outlook, regional economic conditions, and the implications of tariffs and inflation on various markets.