Economic Data Good, Renovation Drama Better

For the week ended 7/12/25.

Economic Data Good, Renovation Drama Better

What can you say? GDP for the second quarter is estimated at a respectable 2%–2.5%, unemployment is holding steady at 4.2%, wage growth is clocking in at 4.0%, and headline inflation sits comfortably at 2.4%. Strip out the noise and, economically speaking, things are looking good – almost too good if you ask a pessimist.

About the only dark cloud hovering is the ongoing tariff drama. Sure, effective tariff rates remains at 15%, but that’s practically a blue-light special compared to the 30% that was being tossed around just a few months ago.

So, is it any wonder that Jerome Powell & Co. are sitting tight on rates while they – and frankly everyone else – wait to see what headline-grabbing moves from the Executive Branch translate into actual economic impact? Well, it appears someone in the White House isn’t thrilled. Enter the latest act in the pressure campaign: accusations that Chairman Powell either lied to Congress or botched the Fed headquarters renovation.

Really? That’s the best they’ve got? Have we truly reduced the case for ousting the Fed Chair to arguments about… interior decorating choices? Or is this about the exterior paint color? Look, cost overruns at the Fed’s HQ aren’t exactly shocking, name a government project that comes in under budget. But is the Chair of the FOMC even involved in construction management? Doubtful.

Back to the point: shouldn’t the debate about Powell’s performance hinge on, oh I don’t know, actual economic and financial data? If those boxes are being checked, maybe the man is doing his job just fine. You decide.

Meanwhile, the stock market took a breather last week, slipping 30 basis points. Bonds, not wanting to be left out, fell about 40 bps. Foreign bonds dipped 70 bps and global real estate lost a cool 80 bps. The only bright spots? Cash and commodities eked out small gains, sometimes boring wins the week.

It was otherwise a quiet week on the economic front as we slip into the dog days of summer. But stay tuned: Tuesday brings the next inflation report and Thursday we’ll get retail sales numbers – both could nudge markets out of their midsummer nap.

And with that, here’s hoping your week is productive and your renovation projects stay on budget, because no one wants to find themselves dragged before a congressional committee to explain why the kitchen backsplash went over cost.

Interesting data point of the week.

Source: Visual Capitalist

Index Info & Disclaimer