Weekly Macro Report, June 30 2025
1. Economic Growth & Outlook
As of mid-2025, the US economic growth trajectory is slowing, with real GDP growth forecasted around 1.4%-1.7% for 2025 and further deceleration into 2026, reflecting a shift from 2.8% growth in 2024. The S&P 500 shows moderate optimism with expected 9-10% returns in 2025, supported by steady earnings growth. However, heightened tariffs and policy uncertainty are weighing on consumer spending, business investment, and labor market conditions. The Fed Funds effective rate is anticipated to hold near 3.75%-4.00% by year-end, consistent with a cautious monetary stance amid inflation pressures and slower expansion. Together, these signals suggest a restrained growth outlook with elevated downside risks through the second half of 2025.
2. Labor Market
The US labor market as of late June 2025 shows moderate strength with mixed signals. Initial unemployment claims declined to 236,000 for the week ending June 21, down from 246,000 the prior week, suggesting a slight easing in layoffs. The unemployment rate remained steady at 4.2% in May, unchanged for three months, indicating stable labor market slack. Meanwhile, nonfarm payrolls grew by 139,000 jobs in May, with gains concentrated in healthcare and leisure sectors, signaling ongoing moderate job creation. Together, these trends reflect a steady but cautious labor market with no sharp shifts in employment conditions as of June 2025.
3. Interest Rates & The Yield Curve
As of late June 2025, the US Treasury yield curve is upward sloping with the 2-year note at 3.3%, 10-year at 4.39%, and 30-year at 4.85%, indicating moderate economic confidence. Credit spreads are evident: Aaa corporates yield above Treasuries, Baa corporates wider still, and 30-year mortgage bonds yield higher, reflecting incremental credit and liquidity risk. The normal curve and modest spreads suggest no imminent recession signals but ongoing vigilance amid Fed rate-cut expectations later in the year.
4. Bond Market Insights
As of late June 2025, the US bond market exhibits a slightly steepened yield curve with the 10-year Treasury yield at about 4.39% and the 2-year at 3.3%, producing a positive 10Y-2Y spread near 1.1%, indicating modest economic growth expectations and reduced recession risk compared to recent flat or inverted levels earlier in the year. Credit spreads between Baa and Aaa bonds remain relatively contained, reflecting moderate credit risk sentiment. Meanwhile, real 10-year yields from TIPS remain low to slightly negative, signaling subdued inflation-adjusted return expectations. The combination of a modestly steep curve and low real yields suggests cautious optimism: the market anticipates gradual monetary policy normalization without aggressive tightening, aligning with a moderate growth outlook but continued vigilance on inflation pressures as June closes.
5. Inflation Dynamics
In May 2025, US headline inflation slowed to 2.4% year-over-year, with core inflation steady at 2.8%, reflecting ongoing price pressures primarily from shelter and food sectors, while energy prices declined. Producer prices rose 2.6% annually in May, indicating moderate upstream cost pressures. Inflation expectations remain anchored around these levels, suggesting gradual cooling but persistent inflation above the Federal Reserve’s 2% target. This US trend aligns with a global pattern of easing but still elevated inflation, driven by supply chain normalization and geopolitical uncertainties.
6. Money Supply
As of early 2025, the US M2 money supply grew modestly by 3.9% YoY in January, slightly up from 3.8% in December 2024. Inflation, measured by CPI YoY, remains elevated but shows signs of moderate easing alongside this stable money supply growth. Meanwhile, loans and leases growth reflect cautious bank lending activity, with credit expansion steady but not accelerating substantially. Fractional reserve banking underpins this growth by allowing banks to lend multiples of their reserves, effectively expanding money supply and influencing inflationary pressures through increased spending capacity. This dynamic suggests controlled monetary growth contributing to balanced inflation risks as of mid-2025.
7. Consumer Sentiment & Spending
US consumer sentiment in late June 2025 showed a notable rebound, with the University of Michigan index rising sharply to 60.7—the largest monthly gain in over 30 years—after six months of decline. Both current conditions and expectations improved, signaling cautious optimism despite sentiment remaining historically low. Meanwhile, the 10-year to 2-year Treasury yield spread at about 1.09% indicates a positively sloped yield curve, reinforcing a moderate economic outlook without immediate recession risk. The combined data suggest consumers are regaining confidence amid an improving economic backdrop as of June 27, 2025.
8. Housing Market
The US housing market shows steady home prices, with the Case-Shiller Index reporting a 3.4% annual gain as of March 2025. Mortgage rates influence affordability, while the median sales price of new houses increased to $426,600 in May 2025. Despite rising average sales prices, current mortgage rates and home price stability are impacting buyer decisions.
9. Equity Markets Overview
For the week ending June 27, 2025, the US equity markets demonstrated cautious optimism with the SPDR S&P 500 ETF Trust (SPY) gaining 0.5%, closing near 615, bolstered by a positive MACD crossover and a bullish 50-day moving average surpassing the 200-day on June 27, signaling potential sustained upside. Sector leadership was driven primarily by Information Technology, notably Nvidia’s 4% gain, while Financials, Energy, and Consumer Discretionary sectors showed mixed but generally moderate performance. Defensive sectors like Utilities and Consumer Staples lagged slightly. Market momentum appears supported by AI-driven trading and geopolitics, setting an optimistic tone going into July 2025.
10. Market Valuation
The S&P 500 PE ratio (27.8 as of June 23, 2025) and Shiller CAPE (36.4% above recent 20-year average) remain elevated versus long-term norms, signaling above-average valuations. Market cap to GDP also points to an overextended US market relative to history and major international peers, reflecting strong investor confidence, robust earnings outlooks, and sustained liquidity flows. International valuations remain lower, with Europe and emerging markets trading at discounted multiples due to weaker growth and geopolitical risks.
11. Market Internals
This week, US market internals show mixed signals. Cyclical stocks have outperformed Defensives since early April, indicating a risk-on mood. Value stocks are preferred due to minimal market discounts. The VIX remains elevated, suggesting ongoing volatility concerns. Momentum and Quality factors are favored, while High Dividend Yield and Minimum Volatility strategies lag. The Equal Weight strategy is outperforming, highlighting broader market participation.
12. Global Equity Performance
Global equity markets showed mixed performance this week ending June 27, 2025. The MSCI USA index remained relatively resilient, supported by steady tech and consumer sectors, while European benchmarks like MSCI United Kingdom and MSCI Germany faced modest pressure amid cautious economic signals. Emerging markets exhibited divergence: MSCI India outperformed, buoyed by robust domestic demand, whereas MSCI China lagged on lingering regulatory concerns. The MSCI Brazil index showed moderate gains, reflecting commodity price support. The MSCI USA/World ratio held firm, signaling US equities' relative strength, while the MSCI EM/World ratio slipped slightly, indicating emerging markets underperformance versus global peers. Overall, the week reflected ongoing geopolitical and macroeconomic uncertainties influencing country-specific equity trends.
13. Commodities
During the week ending June 30, 2025, gold YoY gains remain moderate as inflation expectations cool, while crude oil YoY growth stays subdued under balanced supply. The Gold/Oil Ratio’s correlation with the S&P 500 VIX and the elevated Gold/Silver Ratio alongside a strong US Dollar signal persistent risk aversion. The Copper/Gold Ratio’s divergence from 10-year Treasury yields suggests mixed signals on global growth and monetary policy.
14. Digital Assets
This week ending June 29, 2025, the crypto market displays mixed signals amid geopolitical tensions impacting capital flows. Bitcoin remains resilient near $105,000, supported by a symmetrical triangle pattern suggesting an imminent breakout, albeit with declining trading volumes signaling cautious investor behavior. Conversely, Ethereum has faced a sharp correction, dropping from $2,900 to around $2,260 as investors rotate toward Bitcoin, reducing ETH dominance from 18.2% to 8%. On-chain metrics and futures indicate institutional interest in Ethereum, but broader market uncertainty favors Bitcoin as a relative safe haven. Overall, capital is flowing toward Bitcoin amid risk-off sentiment, while Ethereum’s recovery depends on regaining momentum above $2,500 in the short term.
15. Currencies
This week, the US Dollar Index (DXY) shows tentative bullishness with resistance tested around the 147.9 level, suggesting a possible short-term pullback as price rejects higher levels. EUR/USD remains pressured near 1.17 but risks further downside unless breaking above 1.1725, signaling mixed momentum. GBP/USD trades above 1.36, poised between potential continuation and pullback near key resistance. USD/JPY holds strong support above ¥142, indicating resilience. Other majors like AUD/USD and NZD/USD face headwinds, reflecting cautious risk sentiment ahead of July. Overall, the dollar is moderately strong with some pairs showing consolidation before a clearer directional trend materializes this week starting June 30, 2025.
16. Debt Levels
As of mid-2025, the US federal debt stands at about 124% of GDP, having risen sharply during the pandemic peak of 2020 before stabilizing slightly. Corporate debt remains elevated but has shown a modest decline recently, while household debt is relatively lower compared to private sector debt's historical peak. Compared internationally, US public debt is notably higher than many advanced economies, where public debt levels have slightly declined. The combined high federal and private debt burdens imply ongoing fiscal vulnerabilities and potential constraints on economic flexibility amid global uncertainty. Continued surveillance is critical to balance growth and fiscal sustainability.
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