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Goldman on inflation: "While the effects have so far been modest, we expect the impact of tariffs to reverse progress ... we estimate [tariffs] would raise core PCE inflation from 2.7% year-over-year in May to 3.4% in December 2025 despite offsetting disinflationary pressures."
https://bsky.app/profile/calculatedr.../3lsynh4dkuk2h
The dollar just had its worst start to the year in half a century Amid the trade war, a ballooning deficit, and a sharply falling dollar, investors are finally sweating the math In 2025, the U.S. dollar posted its steepest January-to-June drop since currencies began floating freely in the 1970s.
It's now down more than 10% against a basket of peers.
The plunge reflects mounting investor anxiety over President Donald Trump’s fiscal and trade agenda, including a “Big Beautiful” spending bill that locks the federal deficit in at 6-7% of GDP, or about double the postwar average. All this amid Trump's loud claims of being a "cost cutting Republican." But with U.S. debt now above $36 trillion, markets appear to be genuinely questioning how long the dollar can retain its reserve-currency crown. Related Content Mortgage refinancing heats up as rates slide again The private sector lost a brutal number of jobs last month Here's a quick look at related price action and effects across asset classes and populations. The USD vs. gold and currency peers Not coincidentally, gold — the classic refuge from volatility and currency turmoil — has jumped 25% since the beginning of the year, its biggest first-half rally since the collapse of Bretton Woods. The euro is up 12.5%, the Swiss franc 13.5%, and Japan’s yen nearly 8%. The dollar? Not so much. In another striking contrast, even riskier currencies like Ghana’s cedi, Taiwan’s dollar, and Mexico’s peso have clocked double-digit gains as capital rushes out of U.S. assets in what PIMCO calls “the most prominent capital rotation” in 20 years. Foreign holders of U.S. debt are losing money What's more, even while stock markets in the U.S. and across the globe sit at record highs, the falling dollar has U.S. Treasuries getting hammered. Thirty-year yields hit 5.1% in May before sliding back. This means foreign holders of U.S. debt have generally lost money this year. That’s because, when the dollar weakens, the value of U.S. Treasury bonds falls in foreign-currency terms — so even if the bond pays interest, overseas investors lose money when converting returns back to their own currency. In 2025, the dollar’s sharp drop has erased much of the value of those holdings, especially for investors in stronger currencies like the euro or Swiss franc. Importing inflation The hedge fund manager Spencer Hakimian summarized to Quartz the U.S. dollar's recent price action this way: "Cause = losing monetary credibility. Effect = Imported inflation." That highlights another effect of the falling dollar: It doesn't just hurt investors. It hurts consumers, too. As the greenback loses value, imported goods become more expensive, fueling that "imported inflation" Hakimian mentions. From TVs and phones to pharmaceuticals and groceries, anything sourced from abroad now costs more in dollar terms. Downhill from here? Markets are now watching as Trump tries to jam his fiscal bill through by July 4, just ahead of a looming trade war deadline. The dollar’s fate in the second half of 2025 may rest on whether global investors keep ignoring the math — or finally start calling the bluff, sending it down even further. Until then, the pain may just keep compounding.
It seems we have dueling posts. Between the so far modest effects of one and the immediate effects of another we have to declare Bunion the winner: Cause = losing monetary credibility. Effect = Imported inflation.
Link for Bunion's post:
https://qz.com/us-dollar-plunging-2025-currency
An important takeaway from our winner is the size of deficits and the debt is driving borrowing costs and lending rates higher. If Americans don't want to consider higher taxes then perhaps leaving things as they are is better than what's on offer.
Summary of runner up Goldman's position: "There are several routes to a September rate cut, the economists highlight, pointing to “underwhelming tariff effects, larger disinflationary offsets, and either genuine labor market softness or a scare from month-to-month volatility.”
Waffle house indicator suggests the Fed's gonna cut,. Maybe at the end of July, more likely in September:
https://www.npr.org/2025/07/01/nx-s1...ices-surcharge
To me, the outlook is grim -- jobs are steady but flashing yellow, tariffs are settling in at 10-25% and not going away, inflation is above the magical 2% target and likely to stay there or rise, government debt is above 120% of GDP, personal debt is hitting highs, etc. Yet, the stock mkt continues its climb. Is it the lack of a precipitating event? Is the outlook really not that grim?
Rich white ppl need to stay rich. That's the stock market. It's not reality.
Rates are not a concern for stock investors yet because history show it's better to be bullish even though hard data shows weakness. Another reason is because markets expect Powell to cave. If borrowing rates go up instead, expect an unwind. The same goes for a growth scare, a higher inflation print, or an even weaker dollar
Lots of IRA and 401K money sloshing around that needs to be invested.Quote:
Rich white ppl need to stay rich. That's the stock market. It's not reality.
This. The powers that be have done a good job of pretty much forcing the average Joe to invest in the market in *hopes* that some day they may have enough money to retire somewhat comfortably.Quote:
Originally Posted by Bunion 2020
Maybe. You think employer retirement plans and regular, monthly contributions account for all of it? Doesn't the ~15% drop April to June suggests we haven't hit some steady, unwavering rise driven by monthly retirement contributions to the stock mkt?
Fair point. An example, my sister and BIL are retired, house in a good neighborhood paid off, they are probably worth 3 Mil. on paper all told and can afford a pretty comfortable life. Probably 3-5 Viking type cruises a year, he golfs, she travels. Everytime we talk she bitches that their stocks are not making enough return when all the market seems to want to do is rise.
Shouldn't they be in less volotile stocks at this point anyway? Bonds too.Quote:
Originally Posted by Bunion 2020
Sounds like fear of overspending or actual overspending. And guessing they are in there early 60 tees at least one of them could make it to 90yo so there could be a 30yr time line, allowing plenty of time to stay heavily allocated in a stock index fund. Having almost finished my 6th year of retirement I can tell you it is very hard to switch from mostly saving to mostly spending, it is very unnerving esp w the political turmoil around the world.Quote:
Originally Posted by Name Redacted
^^^ Early 70s. Yes I keep telling her that and they ARE in mostly Bonds and conservative Mutual s. BIL understands that concept, sister, not so much.
Humblebragging.
Thats my parents. The spent their whole lives being extremely frugal and saving more and more for a rainy day whenever that may be, and that mindset of save and hoard has carried through to retirement. They have enough money that i think they are scared to only withdraw enough money from their various retirement vehicles such that their actual balances keep increasing and do not decline. They are the liberal version of the retired fox news viewer and so they think the world is constantly ending and that doesnt help things either. They still save dishwater to use to flush the toilets to save on their water bill.Quote:
Originally Posted by Hopeless Sinner
I just bought another chunk of UNH. After this weeks bump, it has receeded and with earnings to be announced at the end of this month i can see a big bump coming. Everything i read about them seems to indicate that 2025 was just a coincidence of bad luck (bad press from Luigi, bad forecast for healthcare utilization, etc) and that it should recover significantly in the next year if not return to the highs of late 2024.
Same here. Have to remember that they had nothing but a roof over their head at times. Mom didn’t enjoy indoor plumbing until she was 14 - she and her bother dipped buckets in the farm’s well for the household. This was an hour’s drive east of Vancouver not far off the main hwy. Dad was born in Nazi Germany. Growing up only had coal for cooking, very limited heat even in winter. Built bikes - their only mechanized transportation - from scavenged parts. Ate his first orange in his late teens while working deep sea ships. And then the late 70’s happened with 22% mortgage rates and a young family. We just haven’t experienced times like that. Yet.Quote:
Originally Posted by californiagrown
Vsat, my first Pelosi trade, up 50%. Make it 100%, and I will get new gear, pass, and upgrade myself to nationwide holiday inn express next season.
We are all for certain going to die so you should do that no matter what
Maybe its because im still relatively young, but the money i make (or lose) in my self managed brokerage just feels so abstract and not actually connected to the real world. Feels like the money in there only exists in there and isnt actually useful for commerce. I would never think that because i just harvested a couple grand in profit i could now go buy some stuff... i just always reinvest. Not a dime has left my etrade account in 5 years, but plenty has gone in. Now that i think about it, its kind of a weird psychological thing.Quote:
Originally Posted by Cono Este
Both my parents came of age in war zones which happened right after growing up in the deperession which definalty affected how they looked at money but they had close to a million in the end after quiting H school to go to war which was pretty good
Inheriting my 3rd of the money didnt really feel all that connected to anything really, I was already retired I didnt really need the money so life was not any different, pay off the small mortgage, buy new PU trucks, E bikes
OAS/ CPP/ riffs/ rent/ they keep sending me more money than I can spend so I give my kids money
Money and risk is a personal thing. It really comes from your parents, family and personal experience. For example if your dad was a gambler, it effects you.
I am a pretty terrible investor. But that’s because I spent 12 yrs as a delta neutral trader, it took me yrs to unwind that risk aversion to being long only. I also could not really invest as I could trade my firms money against my personal acct. If I was a scumbag.
What I finally figured out, looking at the richest family I know, they literally bought some shares in a good company back in 1945, and have yet to sell anything beyond taxes. 1mm then is approx 3bn today, or was before UPS sold off. . But my buddy has cancer, wont live long, but he still got 100 days in at aspen this yr. .
bless your heart.
I used to ask my buddy the lumber trader hows business, good up 5 grand today, next day shitty lost 20 grand but he never cared about the money
what he cared about was beating me flipping for lunch , get yer quarter out I am going to beat you for lunch !
All i try to do, is what I learnt from my buddy. I buy stocks that will outlive me. I once owned 400,000 shares of Pegasus gold, (mkt maker acct reg t) it close at 4, 20 yrs ago, and still hasn’t reopened. I tried to order the shares to re wall paper my bathroom. Same in Enron. I was the PCoast Specialist when it went down. Made money on that though. The best winner I ever had, was Agriobiotech, went to zero. Made 100k a month for a while doing reversals for credits with the stock hard to borrow. Dollar per month credit, never bought in, luckily.
So I stay away from shit, is what I saying. Amzn, google, msft, and good blue chips are never,going anywhere
I haven't been doing my normal monthly buy in brokerage account last few months and saving up for a good sized s&p drop. But did start buying a little of the schwab "Precious Metals theme" and more today with the copper tariff news down 5%. Taco trade!?