New California Laws Effective July 1 Could Impact Students, Paychecks, Airbnb-Stays

Authored by Sophie Li via The Epoch Times,

A wave of new California laws will take effect on July 1, touching nearly every corner of life, from subscriptions and short-term rentals to wages and student mental health.

Part of a broader package signed by Gov. Gavin Newsom during his latest legislative session, the measures aim to boost transparency, expand health coverage, raise wages, and improve access to legal and mental health support.

Here are some of the new laws.

Short-Term Rental Chores

AB 2202 requires short-term rental hosts, platforms, and anyone else listing the property to disclose all extra charges or penalties—such as cleaning fees—that will apply if guests fail to complete end-of-stay chores.

Rental hosts must detail those tasks before a booking is made. According to the legislation, platforms such as Airbnb are also responsible for ensuring that disclosures are made.

Violators face fines of up to $10,000 per offense.

The legislation builds on a 2023 law requiring all mandatory costs—including service and cleaning fees—to be listed upfront in rental and hotel listings.

Subscription Cancellations

AB 2863 mandates that companies offering subscriptions—such as streaming services or memberships—make it as easy to cancel as it is to sign up.

Companies must also send annual reminders with pricing and cancellation details, including a direct “click-to-cancel” link. Renewals after free trials or initial contract periods now require customer approval.

The law applies to contracts entered into, amended, or extended on or after July 1.

Stolen Goods Sales

SB 1144 targets retail theft by requiring online marketplaces such as eBay and Facebook Marketplace to verify the identity of high-volume sellers, defined as those who complete 200 or more transactions involving at least $5,000 in new or unused goods annually.

The law also requires the online platform to notify law enforcement agencies when it identifies potentially stolen item sellers.

Drink Lids in Bars

AB 2375 requires bars and nightclubs with Type 48 licenses to provide drink lids upon request and post signage informing patrons of their availability.

The measure, intended to combat drink spiking, follows a 2023 law requiring such establishments to offer drug-testing kits, including test strips or straws that detect substances such as Rohypnol and ketamine.

This law applies to more than 2,500 bars and nightclubs across the state, where minors are not allowed, and whether or not the business serves food.

Minimum Wage Increases

Several cities and counties will raise their minimum wage on July 1 as follows:

• Alameda: $17.46

• Berkeley: $19.18

• Emeryville: $19.90

• Fremont: $17.75

• Los Angeles City: $17.87

• Los Angeles County: $17.81

• Milpitas: $18.20

• Pasadena: $18.04

• San Francisco: $19.18

• Santa Monica: $17.81

The statewide minimum remains $16.50. Some industries—such as the hotel and fast food sectors—have higher local minimums.

Domestic Workers

SB 1350 extends Cal/OSHA health and safety protections to domestic workers—such as house cleaners, caregivers, and cooks—regardless of whether they are employed temporarily or permanently.

Student ID Cards

SB 1063 requires middle and high school ID cards to display the 988 Suicide & Crisis Lifeline number. Schools are also encouraged to add QR codes linking to local mental health resources.

Special Education Planning

AB 438 moves up the start of postsecondary planning for students with special needs to the beginning of high school, rather than age 16, when deemed appropriate by their Individualized Education Program (IEP) team.

CARE Court Updates

SB 42 requires that family members or caretakers be notified and kept informed about proceedings under the CARE Act, which allows them to petition for court-mandated treatment plans for individuals with certain mental health conditions.

Fertility Coverage

SB 729 requires most employers that offer health insurance to include coverage for infertility diagnosis and treatment, including in vitro fertilization (IVF).

Religious employers are exempt from the law, and the California Public Employees’ Retirement System (CalPERS)—the agency that manages pension and health benefits for state workers—will not be required to offer this coverage until July 1, 2027.

At Newsom’s request, implementation was delayed until January 2026 to allow time to update California’s benchmark plan and clarify insurer obligations.

Tyler Durden Mon, 06/30/2025 - 18:25

Disney Hit With More Layoffs As Latest Woke Projects Bomb Hard

It would seem that Disney still hasn't learned its lesson when it comes to DEI in entertainment.  The company which just initiated a series of layoffs of hundreds of employees at the beginning in June is now getting rid of at least 2% of staffers in its product and technology division.

The staff cuts are only part of an ongoing trend over the past few years as Disney's profits at the box office tumble into the abyss.  Only ten years ago the company dominated theaters and television, but it is now reeling from an endless string of embarrassing failures.

The company's latest entertainment bungles include the Pixar film Elio, about a Mexican-Domincan boy obsessed with space travel who is accidentally taken by aliens to the "Communiverse", an intergalactic socialist Utopia where all the species of the universe get together and work out their problems. 

Continuing with their messaging that minority characters are infallible no matter what they do, Pixar writes Elio as a spoiled thief who seems to get whatever he wants.  His background as an orphan living with his aunt is meant to invoke sympathy from the audience, but the effort falls flat.

"It was important for our art team to kind of design the world of space, to design the 'communiverse' to be this colorful, welcoming, diverse place, this aspirational place where aliens of all shapes and sizes and colors can come and live together," said director Domee Shi. "And when Elio first lands, he just feels like this is home and he wants to stay." 

The creators and voice actors on the movie hyped up the minority representation of Elio as if they are still living in 2018. 

Zoe Saldaña, the voice of Aunt Olga, shared a personal message at the premiere of Elio in reference to the Mexican representation in the film as well as the ongoing immigration raids in Los Angeles: 

"I do believe that the future of America are Latinos, and people of color...I just think that as long as we keep being who we are and coming from a place of love and dignity and hard work we will win."

Critics also mention the movie's noticeable lack of animation quality, further cementing allegations that Disney has fired most of its seasoned animators and replaced them with cheaper and less knowledgeable artists.  Elio imploded at theaters.  With a budget of over $300 million the animated flick is expected to lose around $150 million and is the worst performing film ever released by Pixar. 

On the streaming front, Disney+ has released their long delayed Marvel series Ironheart, a superhero story featuring woke representation including multiple insufferable trans actors and a black, female ghetto version of Iron Man who is somehow smarter than Tony Stark.  She gets a free ride through college but complains constantly about her circumstances, helps fellow university students cheat on their exams in exchange for cash and steals regularly in order to get what she thinks she's entitled to. 

A typical DEI character with no moral compass and zero likability.  Disney keeps its streaming stats a closely guarded secret and Nielson stats don't come out for a month, but Ironheart is currently being pummeled in audience reviews and third-party ratings companies show audience numbers in the gutter.

In the film industry projects are often released many years after initial production is launched.  This is why it's a big mistake to inject the political messaging of the current day into movies and television, as movements can fail, disappear or change direction before the content is available to audiences.  Ironheart is so dated by its politics that it feels like a time portal back to the early days of the Biden era; an era almost everyone hates.  The smart move would have been to shelve the product and never release it.

The sheer size of Disney's operations allow it to financially weather a number of failed projects, but it's a bad sign that the company is currently relying more on its theme park revenues and less on its film and streaming divisions.  After sinking every franchise it owns with woke messaging, including Star Wars, Marvel, Dr. Who, etc., it's unlikely that Disney will recover anytime soon from its endless box office defeats.

Tyler Durden Mon, 06/30/2025 - 18:00

America's 75,000 Page Horror Story

Via SchiffGold.com,

While most of the American government can be characterized by regulatory overgrowth, few areas loom larger in the public imagination than the Tax Code. This reputation is well earned, as the Tax Code seems to become more complicated each time people try to reform it. 

Hundreds of years of revisions have left American taxpayers in an unenviable situation.

While tax rates are at historic highs, the complexity of the Tax Code itself presents enough problems to be worthy of a complete renewal.

• The first problem with the Tax Code complexity is that enforcement has become such a nightmare that even the well-funded IRS cannot begin to properly enforce it.

• The next problem is that the tax code’s complexity unfairly benefits those with time, resources, and ironically, money, to spend avoiding taxation, allowing the richest and most unethical to benefit from the web of confusion.

• The last problem with the tax code is that it creates a fundamental rift between the American people and the government through providing a realistic view into the complexity and self-contradictory nature of the state.

The IRS is much maligned by anyone who wants to keep their well learned money, yet one of their greatest problems they face is that they can barely keep their head above water organizationally. The tax code is so complicated that it is nearly impossible to carry out action plans, or even create strategic priorities. Any focus that the IRS chooses for a tax cycle can be contradicted by another part of the tax code. Administrations constantly adding in different elements and revisions of the tax codes mean that the source document for enforcement provides much less clear guidance than can be found at other agencies. Only a small part of the tax code can be enforced, and the subjective choice about what part that is allows a lot of room for corruption and uncertainty. Additionally, the IRS bears the burden of punishing people who unknowingly violated the tax code while being unable to hunt down those who use its complexity to their advantage. A simplified Tax Code would benefit the IRS both strategically and administratively. 

The complexity of the tax code benefits the most unscrupulous and wealthy citizens uniquely. Not to mention that some parts of the tax code itself were written to provide benefits to friends of politicians throughout history, it is so vast that people with skilled lawyers and accountants can take a gamble on numerous loopholes and slight misclassification that will allow them to protect their money. Hypothetically, these people should be the greatest target of additional tax laws. When politicians pass tax laws, both they and the citizens are often subconsciously thinking of the unscrupulous wealthy as being on the receiving end of the incoming higher taxation. However, too many years of code growth have cemented the middle class and the most scrupulous  law-abiding rich citizens as those hardest hit by any increase in taxes. The IRS’ inability to enforce the Code along with the massive opportunity for abuse make complicated tax laws a boon for their intended targets.

At the root of the American identity is a repulsion to taxation. Of course some taxation is necessary for any government to exist, but the current state of taxation is a recurring point of contention between American citizens and their government. Countless years and billions of dollars spent trying to fulfill and understand the requirements of the tax code serve as humiliating reminders of our government’s incompetence. Even the officials who voted to make the tax code law can barely understand the parts they most support. The government needs no help losing trust, but forcing a massive and extremely complicated set of laws to come into contact with nearly every American, every year, does little to repair the bond that has been severed. The worst stereotypes of the Federal Government are shown to be true in the tax codes’ bland display of bureaucratic rot and excess.

Before the level of taxation can be discussed, we must first recognize the blatantly terrible practicalities of the tax code. It is both theoretically and practically compromised. It does no good for those enforcing it or those it is being enforced upon.

While a simplified tax code might not provide a special case for every possibility in human life, it might be time to recognize that having a brutally simple tax code would be better.

Some good things would not be as heavily incentivized by tax credits, but the deletion of the miasma of confusion that currently exists would allow Americans of all types to flourish. 

Tyler Durden Mon, 06/30/2025 - 17:40

The Decline And Fall Of Our So-Called Degreed Experts

Authored by Victor Davis Hanson via American Greatness,

The first six months of the Trump administration have not been kind to the experts and the degree-holding classes.

Almost daily during the tariff hysterias of March, we were told by university economists and most of the PhDs employed in investment and finance that the U.S. was headed toward a downward, if not recessionary, spiral.

Most economists lectured that trade deficits did not really matter. Or they insisted that the cures to reduce them were worse than the $1.1 trillion deficit itself.

They reminded us that free, rather than fair, trade alone ensured prosperity.

So, the result of Trump’s foolhardy tariff talk would be an impending recession. America would soon suffer rising joblessness, inflation—or rather a return to stagflation—and likely little, if any, increase in tariff revenue as trade volume declined.

Instead, recent data show increases in tariff revenue. Personal real income and savings were up. Job creation exceeded prognoses. There was no surge in inflation. The supposedly “crashed” stock market reached historic highs.

Common-sense Americans might not have been surprised. The prior stock market frenzy was predicated on what was, in theory, supposed to have happened rather than what was likely to occur. After all, if tariffs were so toxic and surpluses irrelevant, why did our affluent European and Asian trading rivals insist on both surpluses and protective tariffs?

Most Americans recalled that the mere threat of tariffs and Trump’s jawboning had led to several trillion dollars in promised foreign investment and at least some plans to relocate manufacturing and assembly back to the United States. Would that change in direction not lead to business optimism and eventually more jobs? Would countries purposely running up huge surpluses through asymmetrical trade practices not have far more to lose in negotiations than those suffering gargantuan deficits?

Were Trump’s art-of-the-deal threats of prohibitive tariffs not mere starting points in negotiations that would eventually lead to likely agreements more favorable to the U.S. than in the past and moderate rather than punitive tariffs?

Would not the value of the huge American consumer market mean that our trade partners, who were racking up substantial surpluses, would agree they could afford modest tariffs and trim their substantial profit margins rather than suicidally price themselves out of a lucrative market entirely?

Economists and bureaucrats were equally wrong on the border.

We were told for four years that only “comprehensive immigration reform” would stop illegal immigration. In fact, most Americans differed. They knew firsthand that we had more than enough immigration laws, but had elected as President Joe Biden, who deliberately destroyed borders and had no intention of enforcing existing laws.

When Trump promised that he would ensure that, instead of 10,000 foreign nationals entering illegally each day, within a month, no one would, our experts scoffed. But if the border patrol went from ignoring or even aiding illegal immigrants to stopping them right at the border, why would such a prediction be wrong?

Those favoring a reduction in illegal immigration and deportations also argued that crime would fall, and citizen job opportunities would increase, given an estimated 500,000 aliens with criminal records had entered illegally during the Biden administration, while millions of other illegal aliens were working off the books, for cash, and often at reduced wages.

Indeed, once the border was closed tightly, hundreds of thousands were returned to their country, and employers began turning to U.S. citizens. Job opportunities did increase. Crime did go down. Legal-only immigration regained its preferred status over illegal entry.

Trump talked of trying voluntary deportation—again to wide ridicule from immigration “experts.” But why would not a million illegal aliens wish to return home “voluntarily”—if they were given free flights, a $1,000 bonus, and, most importantly, a chance later to reapply for legal entry once they arrived home?

Many of our national security experts warned that taking out Iran’s nuclear sites was a fool’s errand. It would supposedly unleash a Middle East tsunami of instability. It would cause a wave of terrorism. It would send oil prices skyrocketing. It would not work, ensuring Iran would soon reply with nuclear weapons.

In fact, oil prices decreased after the American bombing. A twenty-five-minute entrance into Iranian airspace and bombing led to a ceasefire, not a conflagration.

As for a big power standoff, World War III, and 30,000 dead, common sense asked why China would wish the Strait of Hormuz to close, given that it imports half of all Middle Eastern oil produced?

Why would Russia—bogged down in Ukraine and suffering nearly a million casualties—wish to mix it up in Iran, after ignominiously fleeing Syria and the fall of its Assad clients?

Russia usually thinks of Russia, period. It does not lament when tensions elsewhere are expected to spike oil prices. Why would Russia resupply Iran’s destroyed Russian-made anti-aircraft systems, when it was desperate to ward off Ukrainian air attacks on its homeland, and Iran would likely again lose any imported replacements?

As for waves of terror, Hezbollah, Hamas, and the Houthis have suffered enormous losses from Israel. Their leadership has been decapitated; their streams of Iranian money have been mostly truncated. Why would they rush to Iran’s side to war with Israel, when Iran did not come to their aid when they were battling and losing to the Israelis?

Has a theater-wide war really ever started when one side entered and left enemy territory in 25 minutes, suffering no casualties and likely killing few of the enemy?

As far as the extent of damage to Iran’s nuclear infrastructure, why should we believe our expert pundit class?

Prior to the American and Israeli bombing, many of them warned that Iran was not on the verge of obtaining a nuclear weapon, and therefore, there was little need for any such preemptive action.

Then, post facto, the same experts flipped. Now they claimed, after the bombing that severely damaged most Iranian nuclear sites, that there was an increased threat, given that some enriched uranium (which they had previously discounted) surely had survived and thus marked a new existential danger of an Iranian nuclear bomb.

Was Trump really going to “blow up”, “destroy” or “cripple” NATO, as our diplomatic experts insisted, when his first-term jawboning led from six to twenty-three nations meeting their two percent of GDP defense spending promises?

Given two ongoing theater-wide wars, given Trump’s past correct predictions about the dangers of the Nord Stream II pipeline, given the vulnerability of an anemic NATO to Russian expansionism, and given that Putin did not invade during Trump’s first term, unlike the three presidencies before and after his own, why wouldn’t NATO agree to rearm to five percent, and appreciate Trump’s efforts both to bolster the capability of the alliance and the need to end the Ukraine war?

Why were our “scientific” pollsters so wrong in the last three presidential elections, and so at odds with the clearly discernible electoral shifts in the general electorate?

Where were crackpot ideas like defund the police, transgender males competing in women’s sports, and open borders first born and nurtured?

Answer: the university, and higher education in general.

The list of wrongheaded, groupthink, and degreed expertise could be vastly expanded. We remember the “51 intelligence authorities” who swore the Hunter Biden laptop was “likely” cooked up by the Russians. Our best and brightest economists signed letters insisting that Biden’s multitrillion-dollar wasteful spending would not result in inflation spikes. Our global warming professors’ past predictions should have ensured that Americans were now boiling, with tidal waves destroying beachfront communities, including Barack Obama’s two beachfront multimillion-dollar estates.

Our legal eagles, after learning nothing from the bogus Mueller investigation and adolescent Steele dossier, but with impressive Ivy League degrees, pontificated for years that, by now, Donald Trump would be in jail for life, given 91 “walls are closing in” and “bombshell” indictments.

So why are the degreed classes so wrong and yet so arrogantly never learn anything from their past flawed predictions?

One, our experts usually receive degrees from our supposedly marquee universities. But as we are now learning from long overdue autopsies of institutionalized campus racial bias, neo-racial segregation, 50-percent-plus price-gauging surcharges on federal grants, and rabid anti-Semitism, higher education in America has become anti-Enlightenment. Universities now wage war against free-thinkers, free speech, free expression, and anything that freely questions the deductive groupthink of the diversity/equity/inclusion commissariat, and global warming orthodoxies.

The degreed expert classes emerge from universities whose faculties are 90–95 percent left-wing and whose administrations are overstaffed and terrified of their radical students. The wonder is not that the experts are incompetent and biased, but that there are a brave few who are not.

Two, Donald Trump drove the degreed class insane to the degree it could no longer, even if it were willing and able (and it was not), offer empirical assessments of his policies. From his crude speech to his orange skin to his Queens accent to his MAGA base to his remarkable counterintuitive successes and to his disdain for the bicoastal elite, our embarrassing experts would rather be dead wrong and anti-Trump than correct in their assessments—if they in any small way helped Trump.

Three, universities are not just biased, but increasingly mediocre and ever more isolated from working Americans and their commonsense approaches to problem solving. PhD programs in general are not as rigorous as they were even two decades ago. Grading, assessments, and evaluations in professional schools must increasingly weigh non-meritocratic criteria, given their admissions and hiring protocols are not based on disinterested evaluation of past work and expertise.

The vast endowments of elite campuses, the huge profit-making foreign enrollments, and the assured, steady stream of hundreds of billions of dollars in federal aid created a sense of fiscal unreality, moral smugness, unearned superiority, and ultimately, blindness to just how isolated and disliked the professoriate had become.

But the public has caught on that too many Ivy-League presidents were increasingly a mediocre, if not incompetent, bunch. Most university economists could not run a small business. The military academies did not always turn out the best generals and admirals. The most engaging biographers were not professors. And plumbers and electricians were usually more skilled in their trades than most journalist graduates were in their reporting.

Add it all up, and the reputation of our predictors, prognosticators, and experts has been radically devalued to the point of utter worthlessness.

Tyler Durden Mon, 06/30/2025 - 17:00

MIT Invents "Bubble Wrap" That Pulls Fresh Water From The Air...Even In The Driest Places In The World

MIT researchers have invented a new water-harvesting device — a high-tech version of “bubble wrap” — that can pull safe drinking water straight from the air, even in extreme environments like Death Valley, the driest desert in North America, according to LiveScience.

In a study published June 11 in Nature Water, the team described how their innovation could help address global water scarcity. “It works wherever you may find water vapor in the air,” the researchers wrote.

The device is built from hydrogel, a material that can absorb large amounts of water, sandwiched between two glass layers resembling a window. At night, the hydrogel draws moisture from the air. During the day, a special coating on the glass keeps it cool, allowing water to condense and drip into a collection system.

The hydrogel is molded into dome shapes — likened to “a sheet of bubble wrap” — that swell when absorbing moisture. These domes increase surface area, helping the material absorb more water.

LiveScience writes that the system was tested for a week in Death Valley, a region spanning California and Nevada that holds the record as the hottest and driest place in North America.

Despite the harsh conditions, the harvester consistently produced between 57 and 161.5 milliliters of water daily — about a quarter to two-thirds of a cup. In more humid regions, researchers expect even greater yields. According to MIT representatives, this approach outperforms earlier water-from-air technologies and does so without needing electricity.

One major breakthrough was solving a known problem with hydrogel-based water harvesters: lithium salts used to improve absorption often leak into the water, making it unsafe. The new design adds glycerol, which stabilizes the salt and keeps leakage to under 0.06 parts per million — a level the U.S. Geological Survey deems safe for groundwater.

Though a single panel can’t supply an entire household, its small footprint means several can be installed together. The team estimates that eight 3-by-6-foot (1-by-2-meter) panels could provide enough drinking water for a household in areas lacking reliable sources. Compared to the cost of bottled water in the U.S., the system could pay for itself in under a month and remain functional for at least a year.

“We imagine that you could one day deploy an array of these panels, and the footprint is very small because they are all vertical,” said Xuanhe Zhao, an MIT professor and co-author of the study. “Now people can build it even larger, or make it into parallel panels, to supply drinking water to people and achieve real impact.”

The researchers plan to continue testing the device in other low-resource areas to better understand its performance under different environmental conditions.

Tyler Durden Mon, 06/30/2025 - 16:40

Today President Trump put out a note urging Fed Chair Powell to lower rates.

The following image, courtesy of Conor Sen, shows the central bank rates around the world. Mr. Trump wrote:

Jerome, You are, as usual, "Too Late". You have cost the USA a fortune - and continue to do so - you should lower the rate - by a lot! Hundreds of billions of dollars being lost! No Inflation.

Mr. Trump also wrote "Should be here" and referenced rates between 0.25% and 1.75%.  The current Fed's Fund rate is between 4.25% and 4.5%.   Fed Chair Powell is probably correct about rates currently being "modestly" restrictive, but it is possible we are neutral now.
First, there is some inflation.  The current rate of core PCE inflation was at 2.7% year-over-year in May, up from 2.5% in April. Core PCE inflation has slowed to 1.7% annualized over the last 3 months. Add in a 1.75% real rate - and you get close to the current Fed Funds rate.
It is difficult to predict what will happen over the next year.  There is considerable uncertainty about the impact of policy on inflation and the economy in coming months. Click on graph for larger image.

Goldman Sachs economists noted today:

"We are pulling forward our forecast for the next cut to September. We had previously expected a cut in December because we thought that the peak summer tariff effects on monthly inflation would make it awkward to cut sooner. But the very early evidence suggests that the tariff effects look a bit smaller than we expected, other disinflationary forces have been stronger, and we suspect that the Fed leadership shares our view that tariffs will only have a one-time price level effect. And while the labor market still looks healthy, it has become hard to find a job, and both residual seasonality and immigration policy changes pose near-term downside risk to payrolls."

Maybe the impact on inflation from the tariffs will be less than expected. And it seems likely the impact will be mostly transitory.

It is also possible the economic weakness from policy (immigration, fiscal) will more than offset any boost to inflation from the tariffs.  Although immigration policy might push up inflation for food, etc.  It is very uncertain right now. 
It appears that currently Fed Funds policy is reasonably appropriate.

Trump Pivots To Pressuring Israel For New Ceasefire Deal In Gaza

"MAKE THE DEAL IN GAZA. GET THE HOSTAGES BACK!!!" President Trump wrote on social media early Sunday, pivoting from a month dominated by large-scale Iran strikes to seeking more peace and stability in the long-running Israel-Palestine conflict.

Naturally, the Palestinian side remains doubtful that any real progress will be made, given especially that the Netanyahu government has repeatedly refused to steer away from its primary war aims in the Gaza Strip of utterly destroying Hamas, and ensuring it can never come back to lead.

Ron Dermer, a senior adviser to Prime Minister Benjamin Netanyahu, is expected to travel to Washington this week for discussions on a possible ceasefire, also amid reports that the Israeli leader himself will soon be hosted in the White House. 

President Trump was quoted in The Washington Post last Friday as saying, "I just spoke with some of the people involved. It’s a terrible situation that’s going on in Gaza … We think within the next week we’re going to get a ceasefire."

Following this, Netanyahu held a secretive meeting with his security Cabinet on Sunday as pressure builds to re-enter negotiations with Hamas.

"They promised to stop the war if the hostages were released," one Palestinian resident, Abdel Hadi Al-Hour, was quoted in The Associated Press as saying. "But the war never stopped."

Ceasefire negotiations have not gotten anywhere largely over the question of whether a truce should bring an end to the war entirely. This is as Hamas insists on a full withdrawal of Israeli forces from Gaza in exchange for the release of all hostages; however, Israel has consistently demanded that all Hamas militants disarm and leave the Strip completely.

These are non-starters for both sides at this point, even if their respective populations put pressure on leadership to achieve a deal which would bring relief from war.

Israeli warplanes have continued pounding various areas of Gaza, including more Monday airstrikes on Gaza City. Al Jazeera details the latest as follows:

• Israel has launched dozens of air strikes across Gaza with northern Gaza City in its crosshairs after the military issued forced evacuation threats, raising fears of an intensified ground assault.
• Israeli forces killed at least 80 Palestinians in Gaza since dawn with dozens wounded including in an attack on Al-Aqsa Martyrs Hospital in Deir el-Balah.
• Israel’s opposition leader Yair Lapid urged an end to the war, saying there was “no longer any benefit” for Israel to continue.
• Egypt’s foreign minister says his country is working on a new Gaza deal that includes a 60-day ceasefire in exchange for the release of some Israeli captives.

Palestinian sources have said that over 56,000 Gazans have been killed since the war began, with an additional more than 133,000 wounded. 

And the Israeli side has tallied some 1,139 people were killed in Israel during the October 7 attacks, with more than 200 taken captive after that. Possibly less than 20 living hostages remain, based on prior indications given by Israeli sources.

Tyler Durden Mon, 06/30/2025 - 14:25

SLR: Could It End The Bond Bear Market

Authored by Lance Roberts via RealInvestmentAdvice.com,

On June 25th, the Federal Reserve quietly announced a significant change to the Supplementary Leverage Ratio (SLR). While the headlines were muted, the implications for the U.S. Treasury market were anything but.

For sophisticated investors, this technical shift marks a subtle but powerful pivot in monetary mechanics. It could create demand for Treasuries, improve market liquidity, and push yields lower at a time when the economy is slowing. As shown in the Economic Output Composite Index (EOCI), which comprises nearly 100 data points, recent reports suggest the economy is weaker than headlines imply. The same is confirmed by the 6-month rate of change in the Leading Economic Index, which remains in contractionary territory.

Historically, such readings have coincided with economic recessions. However, this has not been the case since 2022 due to the massive amounts of monetary stimulus that have kept the economy growing. That support is quickly fading, potentially putting the major banks at risk, which brings us to the SLR.

Understanding the SLR and Why It Matters

The Supplementary Leverage Ratio was initially implemented as a post-GFC (Global Financial Crisis) safeguard. The idea was simple: limit the amount of leverage banks could take on by tying it to their capital base, regardless of the riskiness of the assets. That meant a Treasury bond and a junk loan were treated equally for leverage purposes. Unsurprisingly, the rule disincentivized the major Wall Street banks from holding low-risk assets like U.S. Treasuries, particularly in periods of balance sheet stress, in exchange for debts with higher yields.

In a welcome reversal, the Fed announced on June 25th that it, the FDIC, and the OCC are easing that constraint by recalibrating the SLR to reflect a more nuanced risk-based approach. Specifically, the new rule adjusts the enhanced SLR (eSLR) add-on to 50% of the Method 1 Global Systemically Important Bank (G-SIB) surcharge, harmonizing it more closely with international standards. This reduces the leverage burden across the largest U.S. banks and opens up substantial balance sheet capacity.

What does this mean in practice? According to Goldman Sachs’ Richard Ramsden, the proposed changes could unlock between $5.5 and $7.2 trillion in bank balance sheet capacity.

To put that number into perspective, the increase in balance sheet capacity for the banks is equivalent to roughly 25% of GDP.

Unsurprisingly, the Federal Reserve’s member banks, JP Morgan, Bank of America, Wells Fargo, and Citigroup, stand to benefit the most. Most importantly, this opens the door for increased repo financing and direct Treasury purchases, particularly during periods of market dislocation.

While repo and Treasury investments offer modest returns, their low-risk nature makes them ideal candidates for bolstering liquidity and meeting capital requirements. Banks can pivot toward these safer assets in an environment where credit spreads are tight and loan demand remains uncertain without incurring regulatory penalties.

SLR Implications for the Treasury Market

So, what does the SLR have to do with the bond market? We discussed this recently in our Daily Market Commentary when this rule change was first mentioned. To wit:

“Yes, I believe we will. I have, for a long time, like others, been somewhat concerned about the levels of liquidity in the Treasury market. The amount of Treasuries has grown much faster than the intermediation capacity has grown, and one obvious thing to do is to lower, is to reduce the effective supplementary leverage ratio, the bindingness of it. So that’s something I do expect we will return to and work on with our new colleagues at the other agencies, and get done.” – Fed Chairman, Jerome Powell.

Following the 2020 COVID pandemic, bonds have been in a bear market as yields have risen with inflationary pressures and increased Fed funds rates. That yield rise was also compounded by increased Treasury debt issuance in recent years to fund the massive stimulus and spending programs during the Biden Administration. However, the largest Wall Street banks have been reluctant to step in due to regulatory capital constraints. That reluctance keeps yields higher, particularly at the long end of the curve.

With the SLR reform, banks can deploy excess capital into Treasuries without running afoul of leverage rules. This newfound demand could absorb a meaningful portion of net new issuance. The result? A downward pressure on yields, particularly during market volatility when banks typically pull back. In effect, this reform could smooth Treasury market functioning and reduce the risk of another episode like the September 2019 repo blow-up or the March 2020 liquidity crisis.

Furthermore, another underappreciated impact of the SLR change is its effect on the Total Loss Absorbing Capital (TLAC) and Long-Term Debt (LTD) requirements. These rules, intended to ensure that large banks can be wound down in an orderly fashion, also tie into leverage ratios.

Under the new proposal, TLAC and LTD requirements would be reduced by ~5% and ~16% respectively, freeing up roughly $95 billion in wholesale debt across the five largest U.S. banks. In a rising rate environment, that’s not just regulatory relief—it’s a cost-saving measure. Lower funding costs will flow through to margins, providing yet another reason for banks to reallocate capital into U.S. Treasuries and repo financing.

Portfolio Strategy: What Investors Should Do Now

From a portfolio management perspective, this shift is another reminder that the regulatory structure matters as much as monetary policy.

While most investors focus on the Fed’s interest rate decisions, regulatory plumbing like the SLR plays a significant role in shaping asset flows, risk preferences, and liquidity conditions. With banks now likely to increase Treasury holdings, investors should prepare for downward pressure on long-term yields, especially during risk-off periods when the bid for safety intensifies.

The substantial short position against US Treasury bonds could amplify the downward pressure if an event forces a rapid unwind. As we discussed previously:

“Short positions in TLT, the popular 20-year US Treasury Bond ETF, have spiked to over 130 million shares, up from 107 million last month. TLT has 541 million shares outstanding. Consequently, the short interest has risen from 20% to 24% of the float. Furthermore, TLT’s days to cover ratio (short position/average trading volume) is nearly 3.5 days. As the graph below shows, that is far and away the most prominent short position in the ETF in at least the last 15 years.”

This doesn’t necessarily guarantee a bond rally, but it significantly tilts the risk-reward back in favor of duration, particularly in high-quality fixed income. For equity markets, lower long-term yields are a mixed bag. Lower yields are historically bullish for growth stocks, UNLESS yields are dropping rapidly due to slowing economic momentum or recession risk.

Portfolio construction should always remain anchored in risk management, and the risk of being short Treasury bonds is clearly on the rise.

Bottom Line

The Fed’s proposed SLR reforms are not just regulatory housekeeping—they’re a targeted effort to shore up the financial plumbing of the Treasury and repo markets. The Fed is engineering a quiet but meaningful boost to Treasury demand by giving banks more flexibility to hold safe assets.

For investors, that means better liquidity, lower yields, and perhaps a more stable financial system, as long as the unintended consequences stay in check.

As we’ve said before, the devil is always in the details. And sometimes, those details make all the difference.

Tyler Durden Mon, 06/30/2025 - 14:05

Appeals Court Allows Trump Administration To Fire USIP Board Members

Authored by Naveen Athrappully via The Epoch Times,

The Court of Appeals for the District of Columbia Circuit has overturned a lower court ruling that had prevented the Trump administration from restructuring the leadership at the Institute of Peace (USIP), according to a June 27 order.

The issue stems from a Feb. 19 executive order from President Donald Trump declaring USIP “unnecessary” and calling for its activities to be “eliminated to the maximum extent consistent with applicable law.”

USIP was set up by Congress as an independent nonprofit corporation, received federal and private funding, and was tasked with promoting peace via diplomacy and education. USIP’s board of directors is made up of 15 members, three of whom are “ex officio”—they hold their seats due to their positions in the federal government. The remaining 12 are appointed members of the board, designated by the president, and confirmed by the Senate.

On March 14, Trent Morse of the White House Presidential Personnel Office terminated all appointed members. The same day, the three ex officio members signed a resolution removing the board’s president.

On March 17, the Department of Government Efficiency took over USIP headquarters. The administration eventually fired most of the USIP staff and canceled all of its programs. Later, the General Services Administration took control of USIP headquarters.

The next day, USIP and several of its terminated board members sued the government over the firings.

On May 19, District Judge Beryl Howell blocked the federal administration from restructuring USIP, replacing the organization’s leadership, and assuming control of the agency’s office building.

Later that week, Howell rejected the administration’s request for a stay, upholding her decision. The matter then went to the Court of Appeals for the District of Columbia Circuit.

However, on June 27, the appeals court sided with the administration, lifting the district court judge’s blockade.

Plaintiffs in the case had argued their terminations were unlawful and that all federal government actions taken after their removal were invalid, according to the appeals court order.

Plaintiffs argued that USIP was a fully independent entity and not part of the government, or at least the executive branch, and that board members can only be removed by the president under limited circumstances, such as for felony or malfeasance in office.

The federal government argued that USIP was a part of the executive branch as it carried out diplomatic functions, thus entitling the president to fire its board members.

The appeals court ruled the president has the authority to remove executive officers “at will.” And since USIP exercises “substantial executive power,” the government is likely to succeed on its claims that protecting the board against removal by the president is unconstitutional, it said.

USIP has engaged in “extensive activities within the domain of the President’s foreign affairs powers,” the appeals court said.

For instance, USIP has taken part in peace deals involving Israel and the Palestinians and fielded requests from the Philippine government to facilitate a cease-fire with a rebel group, according to the court. The institute also “shapes foreign affairs in the interest of the United States through the exercise of soft power,” it said.

“The President’s inability to control the Institute’s exercise of these ‘significant executive power[s]’ undermines his ability to set and pursue his foreign policy objectives,” the court said, adding that the president is the “sole organ of the federal government in the field of international relations.”

“The President faces irreparable harm from not being able to fully exercise his executive powers,” the appeals court ruled. “That harm outweighs any harm the removed board members may face.”

Courts Backing Trump

In its order, the appeals court cited a ruling made by the U.S. Supreme Court last month in a similar case.

In the case, a district court had blocked the Trump administration from removing a member of the National Labor Relations Board and another member from the Merit Systems Protection Board, according to the May 22 ruling from the Supreme Court.

The plaintiffs said the president was “prohibited by statute from removing these officers except for cause, and no qualifying cause was given,” it said.

However, the Supreme Court lifted the district court blockade, writing that “because the Constitution vests the executive power in the President, he may remove without cause executive officers who exercise that power on his behalf.”

Meanwhile, the Trump administration secured a critical legal victory on Friday after the Supreme Court issued a ruling restricting federal judges from imposing nationwide injunctions against the federal government’s executive policies.

Trump praised the decision in comments during a press conference at the White House.

“This morning, the Supreme Court has delivered a monumental victory for the Constitution, separation of powers, and the rule of law,” he said.

Tyler Durden Mon, 06/30/2025 - 13:25

Today, in the Calculated Risk Real Estate Newsletter: Freddie Mac House Price Index Declined in May; Up 2.2% Year-over-year

A brief excerpt:

Freddie Mac reported that its “National” Home Price Index (FMHPI) decreased -0.23% month-over-month (MoM) on a seasonally adjusted (SA) basis in May. On a year-over-year (YoY) basis, the National FMHPI was up 2.2% in May, down from up 2.6% YoY in April. The YoY increase peaked at 19.0% in July 2021, and for this cycle, bottomed at up 0.9% YoY in April 2023. ...

As of May, 31 states and D.C. were below their previous peaks, Seasonally Adjusted. The largest seasonally adjusted declines from the recent peaks are in D.C. (-4.7), Colorado (-3.1%), Idaho (-3.0%), Texas (-2.7%), and Florida (-2.2%).

For cities (Core-based Statistical Areas, CBSA), 257 of the 384 CBSAs are below their previous peaks.

Here are the 30 cities with the largest declines from the peak, seasonally adjusted. Austin continues to be the worst performing city. However, 4 of the 6 cities with the largest price declines are in Florida. Cities in Florida (10) and Texas (7) dominate this list.

There is much more in the article!

Iran UN Envoy Makes Clear That Nuclear Enrichment 'Will Never Stop'

In a "Face the Nation" interview on Sunday, Iran's ambassador to the United Nations, Amir Saeid Iravani, vowed that Tehran will "never stop" enriching uranium as this is an inalienable right and matter of national sovereignty under the nuclear Non-Proliferation Treaty (NPT).

Iran has constantly highlighted that its archnemesis Israel has a secret nuclear arsenal and is not a member of the NPT, while Tehran has long been a party to the treaty. "You know that we are a member, [a] responsible member of the NPT. And according to this treaty, we have the mutual rights. It means that the right of one side will be the obligation of the other sides," he said.

Via Europa Press

He outlined rights guaranteed under the treaty as "research and development, production of uranium, and use of peaceful energy," as well as "legal protection by the IAEA for our activity and technical cooperation for our development programs."

When asked directly whether even after the 12-day war with Israel, and being on the receiving end of America's B-2 bomber campaign targeting nuclear facilities, Iravani replied, "I think that enrichment will not — never stop."

He then asserted enrichment as "our right. An inalienable right. And we want to implement this right," adding that such activity "will remain always in a peaceful manner."

Responding to allegations in Iranian media that International Atomic Energy Agency (IAEA) Director-General Rafael Grossi is "an Israeli spy" and that he should be arrested, the ambassador said, "No, there is not any threat. It is a very clear law of our parliament that they have suspended our cooperation with [the] IAEA because the agency has not implemented their rights, their responsibility … but there is not any threat against the general director of the IAEA."

As for whether the situation inside the Islamic Republic is safe enough for inspections to resume, he responded, "They are in Iran. They are in safe conditions. But activity has been suspended. They cannot have access to our site."

Meanwhile, The Washington Post has presented new evidence which strongly suggests the US strikes against Fordow, Natanz, and Esfahan were not as effective as the White House is saying:

The United States obtained intercepted communication between senior Iranian officials discussing this month’s U.S. military strikes on Iran’s nuclear program and remarking that the attack was less devastating than they had expected, said four people familiar with the classified intelligence circulating within the U.S. government.

The communication, intended to be private, included Iranian government officials speculating as to why the strikes directed by President Donald Trump were not as destructive and extensive as they had anticipated, these people said. Like some others, they spoke on the condition of anonymity to discuss sensitive intelligence.

Powerful Democratic Senator Chris Murphy will use this info and other data to support his position that "You cannot bomb knowledge out of existence — no matter how many scientists you kill."

NEW: Iran has likely begun to assess damage and conduct repair operations at the Fordow Fuel Enrichment Plant. Commercially available satellite imagery captured on June 28 and 29 shows Iranian heavy equipment near two clusters of three impact points on ventilation shafts at… pic.twitter.com/w2IyR2HpfM

— Institute for the Study of War (@TheStudyofWar) June 29, 2025

Murphy recently explained, "There are still people in Iran who know how to work centrifuges. And if they still have enriched uranium and they still have the ability to use centrifuges, then you’re not setting back the program by years. You’re setting back the program by months."

* * *

Below are more geopolitical headlines and developments via Newsquawk:

MIDDLE EAST

• Israel’s army said it identified the launch of a missile from Yemen on Saturday.
• Egyptian Foreign Minister said work is underway on an upcoming agreement in Gaza that includes a 60-day truce, according to Alhadath via X.
• US President Trump said Israeli PM Netanyahu is in the process of negotiating a deal with Hamas to get hostages back.
• US President Trump said he knew exactly where Iran’s Supreme Leader Khamenei was sheltered and would not let Israel or US armed forces terminate his life, while Trump said he demanded that Israel bring back a very large group of planes that were headed directly to Tehran in the final act of the war. Furthermore, Trump said he was working on the possible removal of sanctions in the last few days and other things which would have given Iran a much better chance at a recovery but warned that Iran has to get back into the world order flow or things will only get worse for them.
• US justified its strikes on Iran as collective self-defence under the UN Charter in a letter to the UN Security Council and said the objective was to destroy Iran’s nuclear enrichment capacity and stop the threat that Tehran obtains and uses a nuclear weapon, while it added that the US remains committed to pursuing a deal with the Iranian government.
• IAEA chief Grossi said Iran has the capacity to start enriching uranium again for a possible bomb in a matter of months, according to BBC.
• Iran’s Foreign Minister said if US President Trump is genuine about wanting a deal, he should put aside the disrespectful and unacceptable tone towards Iran’s Supreme Leader.
• Iran’s Armed Forces Chief of Staff Mousavi told Saudi Arabia’s Defence Minister that they highly doubt Israel’s commitment to the ceasefire, according to Tasnim.
• Iran permitted the transiting of international flights over the centre and west of the country. In relevant news, Emirates cancelled all flights to and from Tehran until July 5th due to the regional situation, while it is to recommence operations to Baghdad on July 1st and Basra on July 2nd.
• US President Trump says he is not offering Iran anything, and is not talking to Iran since destroying their nuclear sites.
• "A source involved in the negotiations for a ceasefire in Gaza told the pro-Qatari news website Arabi 21 this morning that it is believed that an Israeli delegation will arrive in Cairo in the next two days", according to Israeli Radio's Kai.
• Iran's MFA spokesperson Baghaei says Iran and the EU have not agreed on a date for the next round of discussions. Talks are ongoing with the E3.

RUSSIA-UKRAINE

• Russia said its troops captured Novoukrainka in eastern Ukraine, according to RIA.
• US President Trump said on Friday that he may send patriot missiles to Ukraine and commented that he will get the conflict solved with North Korea’s leader Kim.

OTHER

• India’s Ministry of External Affairs said they have seen and rejected the official statement by the Pakistan Army seeking to blame India for the attack in Waziristan on June 28th.

Tyler Durden Mon, 06/30/2025 - 13:05

The End Is Nigh: Liberal Justices Predict "Chaos" & The Demise Of Public Education Without Mandatory LGBTQ Material

Authored by Jonathan Turley,

The end is nigh.

That seems to be the message this week from the three liberal justices at the Supreme Court when faced with the nightmarish prospect of parents being able to remove their young children from mandatory classes on gay, lesbian and transgender material.

The decision in Mahmoud v. Taylor was a roaring victory for parents in public schools. The Montgomery County, Md. school system fought to require the reading of 13 “LGBTQ+-inclusive” texts in the English and Language Arts curriculum for kids from pre-K through 12th grade. That covers children just 5-11 years old.

The children are required to read or listen to stories like “Prince & Knight” about two male knights who marry each other, and “Love Violet” about two young girls falling in love. Another, “Born Ready: The True Story of a Boy Named Penelope,” discusses a biological girl who begins a transition to being a boy.

Teachers were informed that this was mandatory reading, which must be assigned, and that families would not be allowed to opt out. The guidelines for teachers made clear that students had to be corrected if they expressed errant or opposing views of gender. If a child questions how someone born a boy could become a girl, teachers were encouraged to correct the child and declare, “That comment is hurtful!”

Even if a student merely asks, “What’s transgender?,” teachers are expected to say, “When we’re born, people make a guess about our gender and label us ‘boy’ or ‘girl’ based on our body parts. Sometimes they’re right and sometimes they’re wrong.”

Teachers were specifically told to “[d]isrupt” thinking or values opposing transgender views.

Many families sought to opt out of these lessons. The school allows for such opt-outs for a variety of reasons, but the Board ruled out withdrawals for these lessons. Ironically, it noted that so many families were upset and objecting that it would be burdensome to allow so many kids to withdraw.

The Montgomery County school system is one of the most diverse in the nation. And Christian, Muslim, and other families objected to the mandatory program as undermining their religious and moral values.

The majority on the Supreme Court ruled that, as with other opt-outs, Montgomery County must allow parents to withdraw their children from these lessons. The response from liberal groups was outrage. Liberal sites declared “another victory for right-wing culture warriors,” even though the public overwhelmingly supported these parents.

However, the most overwrought language came not from liberal advocates but liberal justices.

Justice Sonia Sotomayor declared that there “will be chaos for this nation’s public schools” and both education and children will “suffer” if parents are allowed to opt their children out of these lessons. She also worried about the “chilling effect” of the ruling, which would make schools more hesitant to offer such classes in the future. It was a particularly curious concern, since parents would like teachers to focus more on core subjects and show greater restraint in pursuing social agendas.

The majority pushed back against “the deliberately blinkered view” of the three liberal justices on dismissing the objections of so many families to these lessons. Nevertheless, even though such material was only recently added and made mandatory, the liberal justices declared that “the damage to America’s public education system will be profound” and “threatens the very essence of public education.”

The truth is that this decision could actually save public education in the U.S.

Previously, during oral argument, Justice Ketanji Brown Jackson had shocked many when she dismissed the objections of parents, stating that they could simply remove their children from public schools. It was a callous response to many families who do not have the means to pay for private or parochial schools.

Yet, it is a view previously expressed by many Democratic politicians and school officials. State Rep. Lee Snodgrass (D-Wis.) once insisted: “If parents want to ‘have a say’ in their child’s education, they should homeschool or pay for private school tuition out of their family budget.”

Iowa school board member Rachel Wall said: “The purpose of a public ed is to not teach kids what the parents want. It is to teach them what society needs them to know. The client is not the parent, but the community.”

These parents still harbor the apparently misguided notion that these remain their children.

Today, many are indeed following Jackson’s advice and leaving public schools. The opposition of public-sector unions and many Democratic politicians to school vouchers is precisely because families are fleeing the failing public school systems. Once they are no longer captive to the system, they opt for private schools that offer a greater focus on basic educational subjects and less emphasis on social activism.

Our public schools are imploding. Some are lowering standards to achieve “equity” and graduating students without proficiency skills. Families are objecting to the priority given to political and social agendas to make their kids better people when they lack math, science, and other skills needed to compete in an increasingly competitive marketplace.

This decision may well save public schools from themselves by encouraging a return to core educational priorities.

It may offer some cover for more moderate school officials to push back against such demands for mandatory readings to young children.

What the majority calls “the deliberately blinkered view” of the dissent could just as well describe the delusional position of public school boards and unions. Schools are facing rising debt and severe declines in enrollment, yet unions in states like Illinois are demanding even more staff increases and larger expenditures.

The liberal justices are right about one thing: This is a fight over “the essence of public education.” However, it is the parents, not the educators (or these justices) who are trying to restore public education to meet the demands for a diverse nation.

Jonathan Turley is the Shapiro Professor of Public Interest Law at George Washington University and the best-selling author of “The Indispensable Right: Free Speech in an Age of Rage.”

Tyler Durden Mon, 06/30/2025 - 12:45

"Frozen At The Wheel": Bessent Slams Fed For Delay On Rate Decisions In Wide-Ranging Interview

US Treasury Secretary Scott Bessent on Monday criticized Federal Reserve policymakers for what he described as their hesitant posture on interest rates, while signaling that the U.S. Treasury is unlikely to alter its current strategy on debt issuance by increasing long-term bond sales.

In a wide-ranging interview, Bessent said that recent yields on long-duration Treasurys make it a poor time to lengthen the government's debt profile. “Why would we do that?” Bessent said on Bloomberg Television. “The time to have done that would have been in 2021, 2022.”

Ten-year Treasury yields currently stand at about 4.26%, well above the levels of shorter-term instruments such as the two-year note (3.73%) and 12-month bills (3.81%). Bessent suggested issuing more long-term bonds at these rates would be counterproductive, especially given his expectation that inflation will continue to moderate and pull interest rates lower across the maturity spectrum.

Treasury Secretary Scott Bessent indicated it wouldn’t make sense for the government to ramp up sales of longer-term securities given where yields are today, though he held out hope that interest rates across maturities will be falling as inflation slows https://t.co/aVi8yJyDOT pic.twitter.com/5yqcNjFCXQ

— Bloomberg TV (@BloombergTV) June 30, 2025

“As we see inflation come down, I think the whole curve in parallel can shift down,” he said, referencing the Treasury yield curve, a key barometer for economic sentiment.

Bessent, who succeeded Janet Yellen as Treasury chief, has retained much of his predecessor’s issuance strategy, despite having previously criticized her for over-reliance on short-term borrowing. At the time, he argued the policy was politically motivated to suppress long-term borrowing costs ahead of the 2024 election.

But Bessent emphasized that now is not the moment to pivot. “Why would we do it at these rates, if we are more than one standard deviation above the long-term rate?” he asked rhetorically.

Fed 'Frozen at the Wheel'

While expressing confidence in the direction of fiscal policy and trade strategy, Bessent leveled pointed criticism at the Federal Reserve’s rate-setting stance. They "seem a little frozen at the wheel,” he said of Fed officials. “My worry here is that, having fallen down on the American people in 2022, the Fed’s now looking at their feet," rather than looking ahead.

The Treasury Secretary cited the Fed’s delayed response to rising prices in 2022 as a pivotal misstep and warned that similar inertia could hinder the central bank’s ability to respond to changing economic conditions. “The Fed made a gigantic mistake in 2022,” he added.

Bessent also pushed back against the idea that recent tariffs have stoked inflation. “We have seen no inflation from tariffs,” he said, calling such effects “transitory” and suggesting they result in only a one-time price adjustment. He hinted at more trade activity on the horizon, saying he expects a “flurry of trade deals” in the days leading up to the July 9 negotiating deadline. The U.S. has already reached agreements with the United Kingdom and China, with ongoing talks still underway.

US Treasury Secretary Scott Bessent discusses the July 9 deadline for trade deals and the potential to “spring back to the April 2 levels” on tariffs for countries that can’t get a deal across the line https://t.co/sI2bIFyJ9z pic.twitter.com/HaKopYwcjx

— Bloomberg TV (@BloombergTV) June 30, 2025

Meanwhile, as speculation mounts over who might succeed Fed Chair Jerome Powell when his term ends in May 2026, Bessent acknowledged that discussions are already underway. “Obviously there are people who are currently at the Fed who are under consideration,” he said, adding that the administration is eyeing the January 2026 seat opening as a potential stepping stone for the next chair.

Observers have noted Governor Christopher Waller - a Trump-era appointee who has recently called for possible rate cut - as a likely contender. Bessent also mentioned that current Governor Adriana Kugler’s term concludes in January, providing another possible opening for strategic appointments.

He downplayed speculation about his own interest in the job. “I’ll do whatever the president wants,” he said, but added that he already has the "best job in DC”

US Treasury Secretary Scott Bessent says he "has the best job in DC," and that the administration will be working on Fed Chair Powell's successor over the coming months https://t.co/hDX84K48mZ pic.twitter.com/JulxyYoppy

— Bloomberg TV (@BloombergTV) June 30, 2025

Looking forward, Bessent expressed optimism about the direction of U.S. fiscal strategy. He voiced support for the Republican budget bill currently advancing in Congress, describing it as a “start” in the effort to bring U.S. debt under control while promoting economic growth.

Bessent also suggested that we could see a lowering of rates, as inflation is "very tame," adding that he is confident the fiscal policy bill will progress in the coming hours.

US Treasury Secretary Scott Bessent says that the proposed Medicaid cuts will get able-bodied people back to work, and bring enrollment down to pre-Covid levels https://t.co/rhGgfhuuR5 pic.twitter.com/Mg9ipQEikp

— Bloomberg TV (@BloombergTV) June 30, 2025

 

Tyler Durden Mon, 06/30/2025 - 11:25

 

Last week, I moderated an amazing panel of emerging Hedge Fund & Alternative Managers at the Bloomberg 2025 Forum. As promiosed, here is the full video of the conversation

The panelists on the Emerging Managers Panel were:

Matthew Cherwin: Co-Founder & CIO, Marek Capital Management

Imran Khan: Founder & CIO, Proem Asset Management

Matt Jozoff: Co-CEO & Portfolio Manager, Trevally Capital

Hear from new and emerging fund leaders on the opportunities and obstacles of launching and growing a differentiated investment strategy in today’s competitive alternatives landscape, including how they are leveraging AI to enhance investment processes, streamline operations, and navigate the early stages of building a fund.

 

 

 

The post Video: Bloomberg Hedge Fund/Alt Fund Manager appeared first on The Big Picture.

Stablecoins Are Becoming 'Default Settlement Layer" For The Internet

Authored by Amin Haqshanas via CoinTelegraph.com,

Stablecoins have become the backbone of internet payments, with adoption now outpacing major traditional card networks in onchain volume, according to Noam Hurwitz, head of engineering at Alchemy.

Hurwitz told Cointelegraph that stablecoins have seen “explosive” adoption, adding that they are “becoming the default settlement layer for the internet.”

Companies like PayPal and Stripe are integrating stablecoins to leverage onchain infrastructure, enabling faster and cheaper transactions. “They’ve already surpassed Visa and Mastercard in onchain volume by 7%,” Hurwitz noted, signaling a decisive shift in how money moves online.

Alchemy, which provides infrastructure to some of the largest stablecoin ecosystems, is at the center of this transformation. Hurwitz said Alchemy is “the onchain provider for Robinhood Wallet” and powers stablecoin flows for fintech giants like Visa, Stripe, Circle, and PayPal.

Stablecoins used for various purposes

Hurwitz said that stablecoins make money “cheap, fast, global, and secure to transfer.” These features have made them popular for various purposes, with broad adoption emerging across cross-border payments and prediction markets like Polymarket.

He added that stablecoins have become massive buyers of US Treasurys, with Tether alone generating $13 billion in profits last year while holding around $113 billion in US debt. “Tokenized money is the base of the tokenized financial system,” Hurwitz said, calling recent financial innovation built on this foundation “exciting.”

Tether holds more US Treasurys than Germany. Source: TFTC

Hurwitz said stablecoins are already functioning as the “default rails” for internet payments in many respects but flagged challenges stemming from the fragmented blockchain landscape.

Institutions, he explained, want to move quickly but must assess provider reliability and counterparty risks, especially in a nascent industry. “Can a small startup really support enterprise-grade operations while building and scaling the services they need?” he asked.

Hurwitz pointed to Kinexys, a tokenized bank deposit launched by JP Morgan, as a major milestone. The permissioned deposit token enables institutional clients to access yield-bearing deposits on a public blockchain with “24/7 settlement, near real-time liquidity and the potential ability to pay interest to holders.”

Interest in stablecoins surge with new regulations

Last week, the US Senate passed the Guiding and Establishing National Innovation for US Stablecoins, or GENIUS Act, a landmark bill establishing federal guardrails for stablecoins.

“With the recent passage of the Genius Act, the regulatory landscape is becoming clearer and more structured, which benefits established financial players while also encouraging innovation,” Hurwitz said.

Meanwhile, Hurwitz pointed out key technical bottlenecks in improving developer and end-user experience despite strong growth. “Companies benefit immensely from settling on crypto rails, but want to decouple the user experience from the underlying technology — and doing so takes deep technical expertise,” he explained.

Looking ahead, Hurwitz expects most financial services to deploy their own blockchains, especially layer 2 networks, to better scale and monetize their ecosystems.

He predicted that infrastructure improvements would drive “seamless crosschain interoperability” between these networks, enabling a more connected and efficient financial system built on stablecoins.

Despite Hurwitz’s optimistic view of stablecoins, a new Bank for International Settlements (BIS) report challenges the notion that they can serve as money in a modern financial system.

The BIS Annual Economic Report 2025 claims stablecoins fail critical singleness, elasticity, and integrity tests. The organization described stablecoins as “digital bearer instruments” that resemble financial assets more than actual money. 

Tyler Durden Mon, 06/30/2025 - 10:45

Mysterious Blast Paralyzes Oil Tanker In Mediterranean Weeks After Russian Port Call

A mysterious blast struck a tanker carrying 1 million barrels of oil near Libya, and the vessel is now being towed to Greece for damage assessment, according to Bloomberg, citing a statement from the ship's manager. The incident comes amid growing concerns about attacks on commercial vessels navigating highly contested waters, including the Strait of Hormuz and other key shipping lanes.

The Vilamoura suffered a severe explosion that appears to have led to significant water intake, flooding the tanker's engine room. The exact cause of the blast—and whether it originated inside or outside the ship—remains unclear. 

Interestingly, Bloomberg compiled ship-tracking data on the Vilamoura's recent sails, revealing that the tanker visited the Russian port of Ust-Luga in early April, where it loaded Kazakh-origin barrels. It also had a port calling at the Caspian Pipeline Consortium terminal near the Russian port of Novorossiysk in May, which primarily handles Kazakh oil. 

The explosion remains suspicious given the tanker's recent routes and raises the possibility of a covert allied special forces operation aimed at paralyzing the tanker known for hauling Russian crude. While purely speculative at this stage, the theory is not entirely far-fetched given the ongoing war in Ukraine as European maritime authorities prepare to launch a formal investigation into the incident.

Related maritime news:

• Container Ship Sinks In Arabian Sea Near Oman As Regional Conflict Worsens

• Widespread GPS Jamming Across Strait Of Hormuz; Six Supertankers Perform Abrupt U-Turns

• Ship Carrying 800 EVs Abandoned In Pacific After Fire Breaks Out

.  .  . 

Tyler Durden Mon, 06/30/2025 - 10:25

3 Goals For Trump's Trade Negotiations

Authored by Adam Millsap viathe American Institute for Economic Research (AIER),

The Trump administration has increased tariff rates on dozens of countries in part to kickstart trade policy negotiations. These tariffs include 10-percent tariffs on dozens of countries, tariffs of over 30 percent on China, 50-percent tariffs on steel and aluminum, and 25-percent tariffs on autos. While the specifics of each negotiation will vary depending on the country’s role in the global economy and its current trade laws, there are three high-level goals relevant to all countries Trump should pursue. If he is successful, these negotiations will make US manufacturers more competitive, keep prices low for consumers, improve America’s ability to confront China, and help reduce the risk of a global trade war.

The US Court of International Trade recently ruled that many of Trump’s tariffs are illegal, but they’ve been allowed to remain in place pending appeal. In the meantime, Trump’s administration is discussing trade policy with several countries. This is wise since keeping the tariffs in place long-term will hurt the US economy. The Penn Wharton Budget Model estimates that Trump’s reciprocal tariff plan would reduce GDP by six percent and wages by five percent if it became permanent. A middle-income household would face a long-term income loss of $22,000. This income loss would offset nearly 15 years of tax savings that the average family receives from the Tax Cuts and Jobs Act, Trump’s signature tax plan from his first term.

The primary goal of Trump’s trade negotiations should be to expand trade by reducing tariff rates and other trade barriers.

Here are three ways his administration could achieve this goal.

• First, negotiate zero-for-zero tariffs on manufacturing inputs that would remove tariffs on inputs needed by USmanufacturers. These could be modeled on the terms contained in the United States-Mexico-Canada Agreement (USMCA) that expanded access to intermediate inputs for thousands of small and medium-sized US manufacturers, allowing them to expand production and increase jobs for American workers. Agreeing to similar terms with other countries would ensure American manufacturers can get the materials they need to produce high-quality products.

• Second, negotiate the elimination of non-tariff foreign trade barriers that inhibit US exports, US foreign direct investment, and US electronic commerce. Trade barriers include laws, regulations, policies, and practices—including non-market policies and practices—that distort or undermine competition. Examples include inadequate intellectual property protections, local content requirements, export subsidies, and unnecessary safety or sanitary standards. Country-specific examples that should be reformed are provided annually by the United States Trade Representative in its National Trade Estimate Report on Foreign Trade Barriers.

• Third, negotiate tougher trade enforcement provisions to prevent China and other countries from evading US trade laws by rerouting exports to the United States through other countries. Countries should agree to allocate more resources to the enforcement of trade laws and verifying the country of origin of the goods that cross their borders. This would protect US consumers and firms from illegal or unsafe goods and help maintain the integrity of the global trade system.

Reducing tariffs on manufacturing inputs, eliminating non-tariff trade barriers, and improving enforcement of US trade laws would help the Trump administration accomplish several of its goals. First, US exports would be more competitive, which would boost manufacturing output and create jobs. Second, the cost of inputs would be reduced, and reciprocal tariff rates could be lowered, which would help keep consumer prices low. Third, by enhancing enforcement of US trade laws, the administration would be better equipped to address China’s objectionable trade policies without unduly inhibiting mutually beneficial trade with friendlier countries.

Nations that close themselves off from the world stagnate and fail. The best known example is China’s inward turn that started in the fifteenth century and lasted until the late twentieth. China missed out on the industrial revolution and by the 1800s it had dramatically fallen behind the West. Today, it is still playing catch-up.

Trump has an opportunity to improve international trade policy and ensure that America plays a leading role in the global economy for decades to come.

 

Tyler Durden Mon, 06/30/2025 - 10:10

Today, in the Calculated Risk Real Estate Newsletter: FHFA’s National Mortgage Database: Outstanding Mortgage Rates, LTV and Credit Scores

A brief excerpt:

Here are some graphs on outstanding mortgages by interest rate, the average mortgage interest rate, borrowers’ credit scores and current loan-to-value (LTV) from the FHFA’s National Mortgage Database through Q1 2025 (released last Friday).
...
This shows the surge in the percent of loans under 3% starting in early 2020 as mortgage rates declined sharply during the pandemic.

Note that a fairly large percentage of mortgage loans were under 4% prior to the pandemic!

The percent of outstanding loans under 4% peaked in Q1 2022 at 65.1% (now at 53.4%), and the percent under 5% peaked at 85.6% (now at 71.3%). These low existing mortgage rates made it difficult for homeowners to sell their homes and buy a new home since their monthly payments would increase sharply.

This was a key reason existing home inventory levels were so low. However, time is eroding this lock-in effect.

There is much more in the article.

9 Underage Girls Sexually Abused By Syrians At Swimming Pool, Mayor Points To 'Hot Weather'

Via Remix News,

After underage girls were sexually assaulted in the Barbarossabad swimming pool in Gelnhausen, the CDU mayor of the area pointed out that “hot weather” makes tempers “fray.”

However, local Mayor Christian Litzinge (CDU) appeared to allude that the weather is at least partly to blame for the incident.

In a statement to Welt, he said: “Of course, it’s always high temperatures, and sometimes tempers are frayed.”

In a separate interview with Bild, he said, “We have zero tolerance for that.”

As Remix News previously reported, the first group of girls were groped and molested by the group of Syrians, but when they complained to a lifeguard, he took no action.

“Since we couldn’t see exactly what had happened, we sent the girls back into the water,” pool manager Nils Tischer explained to Hessischer Rundfunk.

It was only after more girls made a complaint from separate groups that the police were called.

In total, at least nine girls came forward, ranging in age from 11 to 17.

The girls told authorities that the four Syrians, aged 18 to 28, groped them in the lazy river, feeling them all over their bodies, including their genitals. A fifth suspect managed to escape, and police are still looking for him.

According to Mayor Christian Litzinger (CDU), all four suspects are from the same family in the Main-Kinzig district.

They were all arrested and charged, in addition to receiving a ban from the outdoor pool.

Alice Weidel, the Alternative for Germany (AfD) co-leader, also posted about the incident on social media, calling for “immediate deportations” in the case.

Sexuelle Belästigung von Mädchen: Gleich 9 Opfer zeigten sexuelle Übergriffe an, eine Gruppe "syrischer Staatsangehöriger" soll die Taten in einem Freibad im CDU-regierten Hessen begangen haben. Sofortige Ausweisung der Täter veranlassen! #DeshalbAfD pic.twitter.com/jtVkT7AeHI

— Alice Weidel (@Alice_Weidel) June 28, 2025

Attempts to downplay the problems in German swimming pools

Litzinger’s comments echo some other “excuses” offered for sexual violence and assaults from migrants at Germany’s once peaceful swimming pools. An article in 2023 from Zeit attempted to claim that much of the violence and sexual assaults were due to rising French fry prices.

At the time, Alice Weidel, co-leader of the Alternative for Germany (AfD), criticized the claim.

“Zeit blames ‘French fry prices’ for violence and sexual assaults in outdoor pools, ZDF claims an interplay of heat and the meeting of many people, Deutschlandfunk writes about too high ‘expectations’ that cannot be met. The degree to which the media trivializes migration problems no longer knows any limits,” wrote Alice Weidel, parliamentary leader of the AfD party.

Die #Zeit macht "Pommes-Preise" für Gewalt und sexuelle Übergriffe in Freibädern verantwortlich, das #ZDF ein Zusammenspiel von Hitze und dem Aufeinandertreffen vieler Menschen, der Deutschlandfunk eine zu hohe "Erwartungshaltung", die nicht erfüllt werden könne. Der Grad der…

— Alice Weidel (@Alice_Weidel) July 17, 2023

Just a week before that statement, the actual workers at the swimming pools offered an entirely different reason for the increasing violence. Employees of the Columbiabad outdoor swimming complex in Berlin penned a letter to the Der Tagesspiegel newspaper complaining about perpetrators they describe as “mainly Arab migrants and Chechens” who are engaging in the sexual harassment of women and mass brawls on the premises, while also leaving the complexes in disgusting conditions. As a result, the entire pool was shut down for an indefinite period of time due to workers calling out sick from stress.

Remix News has long reported on the growing crime trend in German swimming pools, including mass brawls and sexual assaults, as well as attacks on police, security officials and even lifeguards working at the pools.

In 2022, Remix News covered how the president of the Federal Association of German Swimming Champions (BDS), Peter Harzheim, said he can no longer recommend that families visit such facilities on weekends. Harzheim claimed he would be “acting irresponsibly” if he attended an outdoor pool with his own three grandchildren due to violence and assaults, which the Remix News article details.

Some individuals have been seriously injured. Last year, for example, a woman had her nose broken when she was caught in the middle of a mass brawl involving foreigners.

In 2023, Welt released a popular video documentary detailing how “macho culture” from migrants was turning the swimming pools in Germany upside down.

Columbiadamm swimming pool in the multicultural neighborhood of Neukölln, Berlin, was closed down due to over 40 warring youths. Welt lays the blame squarely at the feet of “macho culture” from immigrant youth. In Pankow, a swimming pool had to be shut down twice in one week due to mass brawls between young people.

In the German city of Celle, 20 “rampaging youth” attacked swimmers and sexually assaulted them, including beating one female who rejected their advances. When lifeguards attempted to stop them, they threatened them as well. As a result, the entire swimming pool was shut down.

Read more here...

Tyler Durden Mon, 06/30/2025 - 09:25

Futures Push Higher Into Record Territory Amid Trade Talk Progress

S&P 500 futures pushed deeper into record territory as progress in trade negotiations aids sentiment following Friday’s record high close for cash index, the first since February. As of 8:00am ET,  S&P futures are up 0.4% on positive trade headlines, including US/Canada, US/EU, US/India, and US/Taiwan (on Friday, the US/Canada flare up limited gains late in the session, with Canada reversing just two days later and agreeing to withdrew its digital services tax on US tech companies to restart talks). Nasdaq futures gain 0.6% amid a continued meltup in AI names and the most shorted basket; tech stocks lead in premarket trading, with Mag7/semis producing early strength, banks higher on de-reg, with Industrials also pushing Cyclicals over Defensives. Major European markets are all lower with France leading and Spain lagging, while the Asian session saw Japan leading and HK lagging given weakness in HSTECH. Besides the Canadian U-turn, French Finance Minister Lombard said hes optimistic about securing a EU/US trade deal before the July 9th deadline; India’s trade team extended their stay in the US to work on a deal. Outside of trade, focus for the week will be on quarter-end today, Powell speaking and ISM Manf on Tuesday and Payrolls on Thursday, along with negotiations over Trump’s “One Big Beautiful Bill.” Yields are lower with the very front-end selling off while 10Y yields are down 2bps to 4.25%. Month-end bond index rebalancing at 4pm New York time has potential to drive buying by passive investors. The USD starts the week lower. Commodities are mixed with Energy weaker, precious higher, and Ags mixed. Today’s macro data focus is Chicago PMIs (9:45am), Dallas Fed Manf (10:30am), Fed’s Bostic (10am), Goolsbee (1pm); markets await jobs data over the next 3 sessions.

In premarket trading, Tesla is the only stock among Magnificent 7 companies falling, down 0.8%, as President Trump’s landmark budget bill passed a key senate hurdle over the weekend. The bill cuts electric vehicle and other clean energy credits. Other Mag7 names are all higher (Amazon +0.6%, Meta +1.9%, Apple +0.8%, Nvidia +0.7%, Alphabet +1.2%, Microsoft +0.6%). 

• Circle Internet Group (CRCL) falls 4% after JPMorgan — a lead in its successful IPO this month — starts coverage with an underweight recommendation due a valuation pushed beyond the broker’s “comfort zone.”
• Disney (DIS) climbs 2% after Jefferies upgraded it’s rating to buy, with the broker now seeing limited risk for a slowdown for its key parks division in 2H 2025.
• Goldman Sachs Group (GS) rises about 2%, gaining with other US banks after the industry’s biggest names comfortably cleared the Federal Reserve’s annual stress test late Friday, setting the stage for lenders to boost buybacks and dividends for shareholders. Wells Fargo (WFC) +2%; Bank of America (BAC) +1%
• Juniper Networks (JNPR) gains 8.4% and HP Enterprise (HPE) rises 8% after the Justice Department settled its lawsuit challenging Hewlett Packard Enterprise’s $13 billion takeover of Juniper Networks, less than two weeks before a trial was set to start, clearing a key hurdle for the takeover.
• Moderna Inc. (MRNA) climbs 5% after saying its experimental flu shot met its goal in a late-stage trial, clearing the path for its broader strategy of selling combination vaccines.

The de-escalation in the conflict between Israel and Iran, combined with data highlighting the US economy’s resilience, propelled the S&P 500 to a record high last week, marking a stunning rebound from April’s tariff-induced rout. Subdued inflation is also strengthening market expectations for interest-rate cuts, even as the Federal Reserve maintains a cautious stance.

Sure enough, US futures continue to climb on positive trade developments ahead of the July 9th deadline; Canada withdrew digital service tax on tech firms to restart talks w/ US, France’s finance minister said EU can reach some form of agreement before July 9th deadline, India’s team extended their stay in the US to work on a deal, Taiwan noted constructive progress, although Japan talks reportedly stalled over auto tariffs.  With Trump’s July 9 trade deadline fast approaching, officials say negotiations with major partners such as China and the European Union are making progress. Talks with Canada are back on track after the country withdrew a digital services tax, while India’s trade team extended their stay in Washington to iron out differences.

“There is room for further investments in stocks. However, let us not forget that the tariffs will bring a stagflation risk on the US economy,” said Fabien Benchetrit, head of target allocation for France and southern Europe at BNP Paribas Asset Management. “Looking at all the positioning indicators at my disposal, I can not exclude a melt-up.”

Elsewhere, Trump’s One Big Beautiful Bill Act starts a Senate debate/vote this morning with the goal still for a passage by July 4th, after passing a key procedural block by a narrow margin over the weekend. Negotiations are continuing as Republicans seek to convince holdouts to support it for final passage. The nonpartisan Congressional Budget Office estimates the measure would add nearly $3.3 trillion to US deficits over a decade, weighing on the greenback.

Momentum trades persisted not only in stonks, but also in FX, and the dollar resumed its decline, falling as much as 0.4% against a basket of currencies to trade near three-year lows. The Bloomberg dollar index is down almost 9% for the year, its worst first half since the gauge’s inception in 2005.

“The US dollar remains under cyclical downward pressure, driven by ongoing uncertainties surrounding US fiscal and trade policies,” noted Lloyd Chan, a strategist at Mitsubishi UFJ Financial Group. “One key driver that could further hurt the US dollar is the potential surge in fiscal debt stemming from President Trump’s one big beautiful bill.”

In Asia, the Taiwan dollar plunged more than 2% against the greenback. The sudden move in late trading followed a pattern seen on Friday, fueling speculation the central bank intervened to curb strength in the currency.

Investors are looking to upcoming data, including the monthly payrolls report, to assess the strength of the economy and the outlook for interest rates, with swap traders pricing in at least two quarter-points of Fed easing this year. The employment data “will be watched closely for any signs that the US economy is reaccelerating or slowing more than anticipated,” said Daniel Murray, chief executive officer of EFG Asset Management. “If the latter, then the Fed would be expected to cut rates earlier, although it would be more concerning from the corporate side of things.”
 
European stocks erase early gains as the Stoxx 600 declines 0.2% with auto, bank and mining shares leading the broader market lower. Here are the most notable movers: 

• Serica Energy shares jump as much as 7.9% as it prepares to restart production on the Triton floating production, storage and offloading vessel in the UK North Sea after completing work on the project.
• Kardex shares rise as much as 8% to trade at their highest level in over four months after being upgraded by Kepler Cheuvreux.
• Real estate gains, and is the best-performing sector in Europe, as Deutsche Bank upgrades several names and says it favors commercial real estate over residential.
• STMicroelectronics and Infineon shares gain as both stocks are placed on positive catalyst watch at JPMorgan.
• Renewable energy stocks including Vestas and Orsted drop as the Senate’s latest version of President Donald Trump’s spending package looks to phase out key tax incentives for US wind and solar projects more aggressively.
• Forbo shares drop as much as 5.2%, the most in over six weeks, after announcing its Chief Financial Officer and interim Chief Executive Andreas Jaeger will be leaving the floor covering and adhesive manufacturer in the fourth quarter of 2025.
• Croda shares drop as much as 4.3% on Monday after Kepler Cheuvreux initiated coverage of the UK-based chemicals supplier with a reduce recommendation.
• Galderma shares fall as much as 4.5%, the most in over two months, as UBS cut the stock to neutral from buy following its recent strong performance. Broker sees limited upside ahead.
• Man Group shares fall as much as 3.6%, the most since mid-April, after Peel Hunt downgrades the investment management firm’s stock to add from buy, citing the performance of its AHL funds in the current market environment.
• WH Smith shares drop as much as 8.3%, the most in 14 months, after the retailer completed the sale of its high street business, but under revised terms that will see lower gross proceeds flow into its accounts.
• TT Electronics shares drop as much as 7.7%, pulling back from a six-month high, after the electronics company reported a drop in sales during the first five months of the year ahead of its annual general meeting later today.

Earlier in the session, Asian stocks edged lower, reversing early gains, as losses widened in Hong Kong and Taiwan in late trading. Tech shares weighed on the regional benchmark after making advances last week. The MSCI Asia Pacific Index erased an increase of as much as 0.4% to trade 0.2% lower, with TSMC, Tencent and Alibaba the biggest drags. Gauges in India and the Philippines also fall, while those in Japan, South Korea and Australia closed higher. Tech firms listed in Hong Kong mostly traded lower as investors took some money off the table ahead of a deadline for trade talks with the US next week. Shares fell more than 1% in Taiwan amid equity outflows and as the local currency slumped in a sudden move toward the end of trading. 

In rates, treasury futures advance in early US session, outperforming European bonds gaining on UK GDP and regional German CPI data. Yields are 2bp-3bp richer across tenors with curve spreads little changed; 10-year TSY near 4.25% is about 2.5bp richer on the day and about 1bp better vs bunds and gilts in the sector. Month-end bond index rebalancing is projected to increase duration of Bloomberg Treasury index by 0.07 year. Bunds gain, having benefited from state inflation readings that point to the national rate coming in slightly below the consensus later on Monday. Italian CPI also rose less than expected. German 10-year borrowing costs fall 1 bp to 2.58%. 

In FX, the Bloomberg Dollar Spot Index falls 0.2% while the yen take top spot among the G-10 currencies, rising 0.3% against the greenback. The pound is the weakest with a 0.1% fall.

In commodities, oil slightly lower following headlines of a potential sizeable OPEC+ production increase on Friday, with the meeting set for this weekend. CTA models are now firmly for sale in oil—nearly $10bn in selling expected over the week across Brent and WTI. WTI trades down 0.3% to around $65 a barrel. Energy remains a funding short. Spot gold climbs $10 to around $3,285/oz.

Looking at today's calendar, the US data slate includes June MNI Chicago PMI (9:45am, several minutes earlier for subscribers) and Dallas Fed manufacturing activity (10:30am). Ahead this week are ISM manufacturing, JOLTS, ADP employment and June employment report — on Thursday ahead of July 4 holiday. Fed speakers include Bostic (10am) and Goolsbee (1pm). Tuesday, Fed Chair Powell participates on a policy panel in Sintra with BOE Governor Andrew Bailey, ECB President Christine Lagarde, BOJ Governor Kazuo Ueda and Bank of Korea Governor Chang Yong Rhee.

Market Snapshot

• S&P 500 mini +0.4%
• Nasdaq 100 mini +0.6%
• Russell 2000 mini +0.5%
• Stoxx Europe 600 -0.2%
• DAX little changed
• CAC 40 little changed
• 10-year Treasury yield -3 basis points at 4.25%
• VIX +0.8 points at 17.07
• Bloomberg Dollar Index -0.2% at 1193.38
• euro +0.1% at $1.1732
• WTI crude little changed at $65.5/barrel

Top Overnight News

• Trump’s $4.5 trillion tax-cut bill faces a marathon voting session on dozens of amendments in the Senate today. It faces opposition from around eight Republican senators. The CBO estimates the proposal would add $3.3 trillion to US deficits over the next decade. BBG
• Congressional Budget Office said the Senate version of the Trump tax bill will add USD 3.3tln to US debt over the next decade: BBG
• Elon Musk posted on X that the latest Senate draft bill will destroy millions of jobs in America and cause immediate strategic harm to the country, while he added it is utterly insane and destructive, as well as gives out handouts to industries of the past while severely damaging industries of the future.
• Fox's Pergram says "Senate not expected to begin vote-a-rama until 9 am et on Big, Beautiful Bill. Most vote-a-ramas run 9 to 15 hours. House not expected to vote until Wednesday at the earliest": Fox 
• Canada has scrapped a digital services tax that targeted US technology companies, in an effort to smooth trade negotiations with its neighbor after Trump described the levy as a “direct and blatant” attach. FT
• OpenAI is starting to utilize some of Google’s proprietary AI chips to power ChatGPT and other products, the first time it has used non-Nvidia silicon in a meaningful way (OpenAI hopes the Google chips will help reduce costs). The Information
• China’s NBS PMIs for June come in a bit ahead of expectations, including manufacturing at 49.7 (up from 49.5 in May and above the Street at 49.6) and non-manufacturing at 50.5 (up from 50.3 in May and above the Street at 50.3). WSJ
• Trump floated the idea of keeping 25% tariffs on Japan’s cars as talks between the two nations continued with little more than a week to go before a slew of higher duties are set to kick in if a trade deal isn’t reached.
• South Korea sees the need for trade negotiations with the US to continue past next week’s deadline as Seoul continues to seek exemptions from US tariffs including duties affecting the auto and steel industries. BBG
• Ukraine said Russia fired a record 537 missiles and drones yesterday, targeting seven regions. Meanwhile, Vladimir Putin expanded the range of information covered by a state secrecy law. BBG
• France’s finance minister said the EU can clinch some form of trade agreement with the US before a July 9 deadline. BBG
• Iran said it doubts the US-brokered ceasefire with Israel will last, and warned of a firm response to any aggression. Meanwhile, an intercepted call showed Tehran felt the strikes on its nuclear program were less damaging than expected. BBG, WaPo

Trade/Tariffs

• US President Trump announced on Friday that the US is stopping trade talks with Canada due to the latter putting a digital services tax on US tech companies. However, it was reported a few days later that Canada rescinded the Digital Services Tax to advance broader trade negotiations with the US, while PM Carney and US President Trump agreed that parties will resume negotiations with a view towards agreeing on a deal by July 21st.
• US President Trump said in an interview with Fox Business News, which aired on Sunday, that Japan takes in no American cars and its vehicles should be subject to a 25% auto tariff in the US.
• UK government said the UK-US trade deal has today come into force, slashing US export tariffs for the UK's automotive and aerospace sectors, while it added that UK car manufacturers can now export to the US under a reduced 10% tariff quota and that 10% tariffs on goods like aircraft engines and aircraft parts are removed with a commitment to maintain them at 0%.
• Canada acted to support its steel producers and workers in which it set new tariff rate quotas for steel mill product imports from non-FTA partners.
• China Customs said it resumed imports of qualified aquatic products from some Japanese regions.
• Indonesia is to ease import restrictions on some goods including forestry products, plastic materials and some fertilisers, while it offered the US to jointly invest in the Brownfield Project of critical minerals in Indonesia as part of tariff talks.
• Bank for International Settlements said the global economy and financial system have entered a new era of heightened uncertainty, while it added that rising protectionism and trade fragmentation are particularly concerning.
• EU Competition Commissioner Ribera say, on a EU-US deal, “We will not compromise … around sovereignty and around regulation on how to work in our own market,”, via Politico citing excerpts from The Capitol Forum.
• Japan's Tariff negotiator says they will continue working with the US to reach a tariff agreement, while defending national interests. Continuation of 25% auto tariffs would cause significant damage.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks began the week mostly in the green following last Friday's record highs on Wall St but with some of the gains capped heading into month-end and as participants digested a slew of data including somewhat mixed Chinese PMIs. ASX 200 edged higher with strength in the defensive sectors but with upside limited by data including softer-than- expected private sector credit. Nikkei 225 outperformed despite disappointing Industrial Production data which showed a surprise Y/Y contraction and with the index also unfazed by recent comments from US President Trump who noted that Japanese vehicles should be subject to a 25% auto tariff in the US. Hang Seng and Shanghai Comp were mixed following the latest PMI data which showed headline Manufacturing PMI remained in contraction territory, as expected, although Non-Manufacturing PMI accelerated at a faster pace than forecast.

Top Asian News

• US officials are drawing up plans for US President Trump’s state visit to China later this year with a delegation of dozens of CEOs, according to Nikkei.
• US President Trump said they have a buyer for TikTok and that it is a group of very wealthy people.
• Canada’s Industry Minister ordered Hikvision (002415 CH) to cease all operations and close its business in the country after a national security review.
• Japanese government official said regarding factory output that sentiment among manufacturers is worsening over uncertainties in the production environment and the number of firms concerned about the impact of US tariffs on production and shipments slightly increased in May from April.

European bourses kicked off the first trading session of the week with modest gains following the upside on Wall Street, in which the sentiment reverberated into APAC markets before reaching Europe; Stoxx 600 +0.1%. However, gains are modest and benchmarks are gradually dipping into the red with traders cognisant of the looming July 9th reciprocal deadline. Sectors opened firmer with just Energy in the red, though the picture since has become more mixed but with the breadth of price action narrow. Focus on reports that US tariff policies coupled with low river levels are causing the worst supply chain congestion since COVID, according to FT. Issues at the ports of Rotterdam, Antwerp, and Hamburg are expected to last for several months.

Top European News

• UK launches the biggest financial advice shakeup in more than a decade with the regulator unveiling plans for targeted support to help individuals get better returns, according to FT.
• ECB's de Guindos says they are confronting "brutal uncertainty"; Q2, Q3 growth will be almost flat; Consumption as a driver has not happened; must keep all rate options open because of uncertainty.
• ECB updates its monetary policy strategy: Governing Council confirms symmetric 2% inflation target over the medium term; Symmetry requires appropriately forceful or persistent policy response to large, sustained deviations of inflation from target in either direction; all tools remain in toolkit and their choice, design and implementation will enable an agile response to new shocks; structural shifts such as geopolitical and economic fragmentation and increasing use of artificial intelligence make the inflation environment more uncertain.

FX

• DXY has commenced the week, month-end, quarter-end and half-year-end off on a mildly negative footing after a run of five consecutive losses last week. Down to a 96.97 low at worst, while the benchmark remains in the red it has managed to reclaim the figure, but remains shy of the earlier 97.299 peak. For reference, the mentioned session low is another multi-year trough.
• EUR contained. EUR/USD faded out initial gains, peaked at 1.1750, just before Friday's 1.1753 multi-year peak. Focus on the inflation front, though no significant move to German State or Italian prelim CPI thus far, with near term focus firmly on the trade agenda.
• JPY tops the G10 leaderboard. USD/JPY as low as 143.79, is now back to the 144.00 mark but someway shy of the 144.76 peak.
• Sterling marginally softer vs both the EUR and USD. Incremental drivers for the UK light, though today sees the UK-US deal come into force. Cable currently contained within Friday's 1.3683-1.3752 range.
• Antipodeans benefitting from the constructive risk tone and after the PBoC set a firmer Yuan reference rate overnight.
• PBoC set USD/CNY mid-point at 7.1586 vs exp. 7.1681 (Prev. 7.1627).
• South Africa’s DA Party leader said the Democratic Alliance will withdraw from national dialogue with immediate effect and is in the process of losing confidence in the President’s ability to lead the government.

Fixed Income

• Contained overnight ahead of a busy and front-loaded week. Focus remains firmly on the trade and fiscal fronts; awaiting the reciprocal deadline and monitoring the Reconciliation Bills Senate passage respectively.
• While pertinent, the above developments have not changed the macro picture just yet with USTs in the green by just a handful of ticks within a narrow 111-22 to 112-00+ band, a range that is almost a repeat of Friday’s 111-22+ to 112-02 parameter.
• Bunds are firmer on the session, began in the green and lifted on the morning's German data points of Import Prices and Retail Sales. Thereafter, State CPIs printed and while the metrics were mixed the overall skew was cooler-than-previous, defying consensus for a mainland uptick, lifting Bunds to a 130.52 peak.
• Gilts in the green as well, largely following suit to the above price action in Bunds and USTs. Newsflow lighter domestically as the scale of Labour rebellion to PM Starmer’s Welfare Bill appears to have moderated significantly after the u-turn on Friday. While firmer, Gilts remain shy of the 93.36 peak on Friday and by extension last week’s 93.57 high.
• Spanish Economy Minister says we should work to increase the supply of EUR-denominated assets such as joint EU debt issued to finance defence spending.

Commodities

• Crude benchmarks in the red but only modestly so with losses of c. USD 0.20/bbl, after a slightly choppy morning. Began the APAC session subdued given an absence of significant weekend newsflow. This morning, prices found a floor shortly after US President Trump posted that he is not offering Iran anything, and is not talking to Iran since destroying their nuclear sites.
• WTI resides in a USD 64.50-65.45/bbl range while its Brent counterpart trades in a USD 65.92-66.87/bbl range.
• Spot gold is firmer amid the Dollar softness and ahead of upcoming risk events. XAU stopped just shy of USD 3,300/oz this morning after rising from a USD 3,244/oz base.
• Copper futures are subdued with a similar performance to APAC seen in Europe amid the mixed risk appetite; overnight, the latest Chinese PMI data showed Manufacturing PMI remained in contraction territory despite the US-China trade truce, possibly also weighing on sentiment for the red metal.
• Israel’s Oil Refineries said it resumed partial operation of refining activity in Haifa after damage caused by an Iranian missile during the Israel-Iran war, with full operation expected by October.
• Smoke arose from Iran’s Tabriz refinery, which was caused by a nitrogen tank explosion, although there were no casualties from the incident.

Geopolitics: Middle East

• Israel’s army said it identified the launch of a missile from Yemen on Saturday.
• Egyptian Foreign Minister said work is underway on an upcoming agreement in Gaza that includes a 60-day truce, according to Alhadath via X.
• US President Trump said Israeli PM Netanyahu is in the process of negotiating a deal with Hamas to get hostages back.
• US President Trump said he knew exactly where Iran’s Supreme Leader Khamenei was sheltered and would not let Israel or US armed forces terminate his life, while Trump said he demanded that Israel bring back a very large group of planes that were headed directly to Tehran in the final act of the war. Furthermore, Trump said he was working on the possible removal of sanctions in the last few days and other things which would have given Iran a much better chance at a recovery but warned that Iran has to get back into the world order flow or things will only get worse for them.
• US justified its strikes on Iran as collective self-defence under the UN Charter in a letter to the UN Security Council and said the objective was to destroy Iran’s nuclear enrichment capacity and stop the threat that Tehran obtains and uses a nuclear weapon, while it added that the US remains committed to pursuing a deal with the Iranian government.
• IAEA chief Grossi said Iran has the capacity to start enriching uranium again for a possible bomb in a matter of months, according to BBC.
• Iran’s Foreign Minister said if US President Trump is genuine about wanting a deal, he should put aside the disrespectful and unacceptable tone towards Iran’s Supreme Leader.
• Iran’s Armed Forces Chief of Staff Mousavi told Saudi Arabia’s Defence Minister that they highly doubt Israel’s commitment to the ceasefire, according to Tasnim.
• Iran permitted the transiting of international flights over the centre and west of the country. In relevant news, Emirates cancelled all flights to and from Tehran until July 5th due to the regional situation, while it is to recommence operations to Baghdad on July 1st and Basra on July 2nd.
• US President Trump says he is not offering Iran anything, and is not talking to Iran since destroying their nuclear sites.
• "A source involved in the negotiations for a ceasefire in Gaza told the pro-Qatari news website Arabi 21 this morning that it is believed that an Israeli delegation will arrive in Cairo in the next two days", according to Israeli Radio's Kai.
• Iran's MFA spokesperson Baghaei says Iran and the EU have not agreed on a date for the next round of discussions. Talks are ongoing with the E3.

Geopolitics: Ukraine 

• Russia said its troops captured Novoukrainka in eastern Ukraine, according to RIA.
• US President Trump said on Friday that he may send patriot missiles to Ukraine and commented that he will get the conflict solved with North Korea’s leader Kim.

Geopolitics: Other

• India’s Ministry of External Affairs said they have seen and rejected the official statement by the Pakistan Army seeking to blame India for the attack in Waziristan on June 28th.

US Event Calendar

• 9:45 am: Jun MNI Chicago PMI, est. 42.85, prior 40.5
• 10:30 am: Jun Dallas Fed Manf. Activity, est. -12, prior -15.3

Central Banks speakers

• 10:00 am: Fed’s Bostic Speaks on the Economic Outlook
• 1:00 pm: Fed’s Goolsbee Speaks in a Moderated Discussion

DB's Jim Reid concludes the overnight wrap

Good morning and welcome to the last day of a tumultuous H1. I think I got heatstroke three times over the weekend so I'm looking forward to work and air con today. Good luck in parts of France, Spain, Italy, Portugal and Greece (amongst others) as you continue to battle temperatures over 40 degrees.

If the heat doesn't impact you, standby to be disorientated in other ways in this holiday shortened week, as payrolls sees a rare Thursday outing ahead of the Independence Day holiday on Friday. We also have the US ISMs tomorrow and Wednesday, and the various global PMI numbers from tomorrow which will give us a good guide to global economic momentum in June. Elsewhere a highlight will be the ECB forum in Sintra starting today and the European inflation numbers today and tomorrow. The US tax bill should be finalised this week although at the moment it needs to pass the Senate today (or possibly tomorrow), after a drama filled weekend of horse trading, and then back to the House for final approval. The President wants it done by Friday's holiday. At that point attention will swiftly focus to the July 9th deadline extension for reciprocal tariffs. Indeed you'll probably get headlines build up this week and the risk to the market is that with the S&P 500 hitting a new record high at the end of last week, with Treasury yields more becalmed, and with a new tax cutting bill, it's possible that the Trump Administration feels emboldened to be aggressive again. On Friday the US announced that they were stopping trade talks with Canada in retaliation for their digital service taxes and that new tariffs would be launched within a week. However, overnight Canada has dropped this tax to enable talks to restart. This is perhaps a warning shot for the world. So before next Wednesday a lot of water will flow under the global trade bridge.

As noted at the top there is still a fair amount to get through this week first and we'll now go through a few of the main highlights of the week ahead, but remember the full day-by-day calendar is at the end as usual.

For payrolls, DB expects the headline number (+100k forecast vs. +139k previously) to be slightly below the consensus of +113k, with a similar story for private payrolls (DB +100k, consensus +110k, vs. +140k previously). This would also be below the three-month average of 135k and 133k, respectively. Their rationale is based on 1) initial jobless claims being up 8.8% during the June survey week relative to May; and 2) their observation of a recent pattern of subdued summer payroll gains. They also expect the unemployment rate to edge up a tenth to 4.3% but with the risks skewed to it staying unchanged.

Although 100k on payrolls seems low, our economists think the breakeven rate which keeps the unemployment rate steady, is around 100k at the moment and could even be as low as 50k given the Trump Administrations' migration policies. If correct we could have a situation where low payroll growth still tightens the labour market. See US Economic Perspectives: Potential paths for breakeven employment for more on this.

Leading up to payrolls we have JOLTS tomorrow, ADP on Wednesday and also watch out for the employment components in today’s Chicago PMI, tomorrow’s manufacturing ISM, and Wednesday’s Services ISM.

In Europe, the big event will be the ECB's forum on central banking in Sintra running from today through to Wednesday. The policy panel tomorrow will feature heads of the Fed, the ECB, the BoJ, the BoE and the BoK. So plenty of potential headlines there. The ECB will also release its account of the June policy meeting on Thursday and their consumer expectations survey is due tomorrow. Elsewhere in Europe, the BoE will publish its DMP, bank liabilities and credit conditions surveys on Thursday.

In terms of European data, June CPI will continue to be in focus after Friday's prints for France and Spain showed a slight uptick in inflation. Reports for Germany and Italy are out today, with the Eurozone-wide release scheduled for tomorrow. Swiss inflation data is due on Thursday. We also have May German retail sales (today) and factory orders (Friday), Italian retail sales and French IP on Friday.

In Japan the BoJ's Q2 Tankan survey results come out tomorrow with our economists forecasting that the business condition index for large manufacturers in the Tankan survey will worsen -3 points to +9. They expect a similar gauge for large non-manufacturers to slip -2 points to +33. This could be one of a few factors that help influence whether the BoJ hikes again in July, although there's lots of moving parts at the moment including trade agreements with the US.
Asian equity markets are predominantly trading higher this morning. The Nikkei (+1.64%) is standing out, with the index surging to near a one-year peak, propelled by technology stocks. The KOSPI (+0.69%) and the S&P/ASX 200 (+0.52%) are also higher. Chinese stocks are more mixed with the Hang Seng (-0.56%) trading lower, the CSI (-0.02%) flat, but the Shanghai Composite (+0.20%) edging up. S&P 500 (+0.41%) and NASDAQ 100 (+0.57%) futures are both pretty firm for this time of day.

Early morning data indicated that China's manufacturing sector contracted for the third consecutive month in June, although at a slightly slower pace than anticipated. The official manufacturing PMI rose to 49.7 in June (49.6 expected) from the previous month's 49.5. However, the non-manufacturing PMI accelerated a touch, increasing to 50.5 in June, exceeding expectations that it would remain stable at 50.3. Consequently, China's Composite PMI improved to 50.7 in June from 50.4 in May.

In other news, Japan's industrial output fell significantly short of expectations, with a mere +0.5% month-on-month increase compared to the expected +3.4% growth. Although production saw improvements in critical sectors such as machinery and automobiles, five categories—led by non-auto transport equipment—experienced declines.

Recapping last week now and markets were in a buoyant mood, with the S&P 500 rising +3.44% to a new all-time high of 6,173 (+0.52% on Friday) as we closed out the week. Tech stocks outperformed, with the NASDAQ (+4.25%, +0.52% Friday) advancing every day last week to a new high of its own. In Europe, the STOXX 600 (+1.32%) posted a modest weekly gain, with the DAX (+2.90%) outperforming, led by German defense companies. And in Japan, the Nikkei had its best week of 2025 so far, up +4.55% (+1.43% on Friday).

The positive mood started with the de-escalation in the Middle East after Trump announced Monday evening that Israel and Iran agreed on a “Complete and Total CEASEFIRE.” Following this, Brent crude saw its biggest weekly decline since 2022, down -12.00% to $67.77/bbl (+0.06% Friday). Meanwhile, gold fell -2.79% on the back of declining geopolitical risk (-1.61% Friday).

Last week’s upbeat tone was also helped by rising expectations of Fed rate cuts despite decent economic data. The positive data included the flash US PMIs for June (52.8 vs. 52.2 expected) and Friday’s UoM consumer survey, that saw current conditions rebound to a four-month high. On the softer side, we saw higher continuing jobless claims (+1,974k vs +1,950k expected) on Thursday and an unexpected drop in May real personal spending (-0.3% vs. 0.0% expected) on Friday.

Lower oil prices and comments from Michelle Bowman, the Fed’s Vice Chair for Supervision, saw pricing of a July rate cut rise as high as 25% on Wednesday, though it was down to 19% by Friday following a slightly stronger (2.7% vs. 2.6% expected) US core PCE inflation print. Still, the next Fed rate cut is now fully priced by September and 64bps of easing is priced by December (+12.7bps on the week). In turn, Treasury yields moved lower, with the 2yr down -16.0bps (+2.9bps Friday) to 3.75%, its lowest since early April, while the 10yr yield was down -9.9bps to 4.28% (+3.6bps Friday). Treasuries were also supported by the Fed announcing a planned easing of banks’ Supplementary Leverage Ratio.

By contrast In Europe, 10yr bund yields rose +7.4bps to 2.59% (+2.2bps Friday) as the German government unveiled a faster-than-expected ramp up of its fiscal stimulus. However, OATs (+1.7bps) and BTPs (-2.4bps) saw smaller moves, with the 10yr BTP-bund spread falling to its lowest level since 2015 at 88bps. The contrasting rates moves on the two sides of the Atlantic saw EURUSD rise +1.69% on the week to 1.1718, its highest level since September 2021.

Tyler Durden Mon, 06/30/2025 - 08:36