Weekly Talking Points for Financial Advisors (6/30/25)

Read the highlights of this week's commentary from Helios:

• The May personal income and outlays report showed signs of stagflation, with core inflation running hotter than expected and real consumer spending down 0.3%. Households cut back on discretionary purchases, instead prioritizing essentials. Consumers are tightening their belts, and the Fed is likely to face heightened internal debate over rate cuts in the second half of the year.
• The U.S. economy contracted more than initially estimated in Q1 2025, with GDP declining at an annualized rate of 0.5%, revised from the earlier estimate of 0.3%. This was driven by a surge in imports ahead of anticipated tariffs and a downgrade in consumer spending. Economists anticipate a modest rebound in Q2 GDP, with the median forecast at 2%.
• Consumer sentiment rose 16% in June, the first gain in six months, driven by easing fears over tariffs and declining inflation expectations. The sentiment index hit 60.7, with improved views on current conditions. Fewer consumers cited tariffs as a concern, and long-term inflation expectations fell to 4.0%. Labor market outlooks also improved, despite weak real spending in May.

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