Read the highlights of this week’s commentary from Helios:
- The U.S. announced broad new tariffs starting August 1, including 25% on imports from Japan and South Korea, 30% on imports from Mexico and the EU, 35% on imports from Canada, and 50% on Brazilian goods and copper. Key countries are preparing responses, and negotiations are ongoing to avoid escalation. The Yale Budget Lab estimates U.S. households could pay an extra $2,400/year due to these policies. Markets have held up so far, but heightened uncertainty remains in play.
- The June Fed minutes show it is cautiously leaning toward easing but wants more data before acting. Two rate cuts remain the base case, barring a re-acceleration of inflation. Markets expect potential cuts later in 2025, likely in September or December. Be prepared for either a late-summer cut or a longer pause if inflation proves sticky.
- Small business optimism dipped slightly in June, driven by rising inventories and weaker sales forecasts. While inflation and labor concerns eased, taxes remained the top worry, and fewer businesses plan to invest or raise wages. Despite the dip, overall sentiment stayed above historical averages, signaling caution rather than crisis.
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