Portfolio Update – July 2025

General news

• On 01/07/2025, Germany’s annual inflation rate unexpectedly fell to 2% in June, aligning with the European Central Bank’s (ECB) target and beating analyst expectations of 2.2%, according to Destatis. This adds to growing evidence that euro zone inflation is stabilizing, though inflation ticked up slightly in France and Spain. Economists, including Capital Economics’ Franziska Palmas, now expect the ECB to deliver one final rate cut in September. However, ING’s Carsten Brzeski warned that disinflation has been driven mainly by external factors like falling oil prices and a stronger euro, and persistent service inflation remains a concern. The ECB is likely to hold rates steady in July and remain cautious, especially with oil price volatility and potential tariff shocks looming.
• U.S. senators engaged in a marathon “vote-a-rama” on Monday, offering over a dozen amendments to President Donald Trump’s sweeping second-term domestic policy bill, amid tense negotiations and internal Republican divisions. The session, which began early in the morning and stretched late into the night, saw both parties pushing changes, with some bipartisan crossovers on key votes. Notably, moderate Republicans Susan Collins and Lisa Murkowski supported a Democratic amendment to protect rural hospitals, while several Democrats from battleground states sided with Republicans on a proposal to cut Medicaid funds to states aiding certain undocumented immigrants. The amendment process, a hallmark of budget legislation, allows for unlimited proposals—most of which won’t make the final cut but serve to signal political positions ahead of the bill’s final vote, expected once all amendments have been considered.
• On 02/07/2025, Euro zone inflation rose slightly to 2% in June, aligning with the European Central Bank’s (ECB) target, after falling to 1.9% in May, according to Eurostat’s flash data. Core inflation held steady at 2.3%, while services inflation ticked up to 3.3% from 3.2%. Country-specific data showed mixed trends, with easing in Germany, a slight rise in France and Spain, and no change in Italy. The euro rose 0.3% against the dollar following the release. The ECB is expected to hold rates steady in July, with a possible final 25-basis-point cut in September. ECB Chief Economist Philip Lane stated the rate-hiking cycle to curb inflation from its 10% peak is likely over, but emphasized the bank remains vigilant to prevent inflation deviations from becoming entrenched.
• The Senate narrowly passed President Donald Trump’s sweeping domestic policy megabill on Tuesday with a 51-50 vote, requiring Vice President JD Vance to break the tie. Three Republican senators—Thom Tillis, Rand Paul, and Susan Collins—voted against the bill, citing concerns including deficit impact and deep Medicaid cuts. The bill now faces a tough battle in the House, where GOP leadership must overcome internal opposition to the Senate’s changes. With only a slim majority, Speaker Mike Johnson can afford just three defections to pass it. The Congressional Budget Office projects the legislation would add at least $3 trillion to the deficit over the next decade. Lawmakers are racing to finalize the bill before a self-imposed July 4 deadline.
• Federal Reserve Chair Jerome Powell stated that the Fed would likely have lowered interest rates this year if not for President Trump’s tariff plans, which significantly raised U.S. inflation forecasts and prompted the central bank to pause rate cuts. Speaking at a European Central Bank forum, Powell emphasized that future decisions will depend on economic data, declining to confirm whether a July rate cut is on the table. He also avoided commenting on whether he would remain in the Fed after his term as chair ends in 2026. Powell’s remarks come amid heightened political pressure from Trump, who has harshly criticized him, and ongoing global uncertainty surrounding U.S. trade policy, which has complicated economic planning for central banks and investors alike.
• On 03/07/2025, Private sector employment unexpectedly declined in June, with ADP reporting a loss of 33,000 jobs—the first drop since March 2023—defying economists’ forecasts of a 100,000-job gain. The decline was driven mainly by service sector losses in professional, business, health, and education services, though goods-producing jobs, particularly in manufacturing and mining, rose by 32,000. Small businesses were hit hardest, especially those with fewer than 20 employees, while large firms saw payroll growth. Despite fewer layoffs, companies appeared hesitant to hire or replace departing workers. Regional job losses were most pronounced in the Midwest and West, with only the South posting net gains. Pay growth slowed slightly for both job stayers and changers, and the weak data may prompt economists to revise expectations for upcoming government employment reports, which are due later in the week during a shortened trading schedule ahead of the July 4 holiday.
• President Trump announced a trade deal with Vietnam that imposes a 20% tariff on Vietnamese imports and a 40% tariff on goods transshipped through Vietnam. In return, the U.S. gains tariff-free access to Vietnam’s markets. The deal comes ahead of the expiration of a 90-day tariff pause and raises concerns about higher costs for U.S. importers and consumers. Critics warn the tariffs create economic uncertainty, while the Trump administration defends them as revenue-generating.
• The Republican-led U.S. House narrowly advanced President Donald Trump’s sweeping tax and spending megabill in a 219-213 vote early Thursday, overcoming internal party resistance after intense late-night negotiations. The bill, which includes extended 2017 tax cuts, increased border funding, and deep cuts to Medicaid and nutrition programs, now moves to final debate and a vote expected around 5:30 a.m. ET. Despite unified Democratic opposition and concern over the bill’s impact on the poor, GOP leadership pushed it forward without further changes. If passed, the bill heads to Trump’s desk for signature.
• On 06/07/2025, Eight OPEC+ oil producers, including Saudi Arabia and Russia, have agreed to raise their collective crude output by 548,000 barrels per day in August, exceeding the expected 411,000 bpd increase. This decision reflects confidence in a stable global economic outlook and healthy oil market fundamentals. The group is accelerating the unwinding of earlier voluntary cuts, which included a 2.2 million bpd reduction that expired in Q1 and a 1.66 million bpd cut lasting through 2025. Oil prices recently rose due to summer demand and geopolitical tensions but ended Friday at $68.30 (Brent) and $66.50 (WTI).
• President Donald Trump announced he had signed “take it or leave it” letters to 12 countries outlining new U.S. tariff rates on their exports, to be sent Monday. Though he didn’t name the countries, the letters follow a 90-day pause on tariffs above a 10% base rate, set to expire July 9. Trump said some tariffs could rise as high as 70%, effective August 1. Frustrated with stalled trade talks, Trump is shifting from negotiation to unilateral action. So far, deals have only been struck with the U.K. and Vietnam, while efforts with India and the EU remain unresolved.
• On 07/07/2025, U.S. President Donald Trump announced a new 10% tariff targeting countries that align with the “anti-American policies of BRICS,” stating there will be no exceptions. He did not specify which policies or countries this applies to. Separately, Trump confirmed that the U.S. will begin sending letters Monday outlining specific tariff rates and agreements with trading partners.
• On 08/07/2025, The Reserve Bank of Australia (RBA) surprised markets by holding the cash rate steady at 3.85% in July, defying expectations of a 0.25 percentage point cut amid slowing inflation and economic growth. The board voted 6–3 to pause, citing the need for more data to confirm inflation is on track to sustainably return to the 2.5% target. This decision follows earlier cuts in February and May, after rates had held at 4.35% since November 2023. The RBA highlighted global trade uncertainties, domestic demand-supply imbalances, and weak productivity as key risks. Markets reacted with volatility, and the Australian dollar briefly rose to 65.5 US cents.
• President Donald Trump announced that starting August 1, imports from at least 14 countries will face steep new tariffs, following the expiration of a 90-day pause. Countries including Japan, South Korea, Malaysia, Kazakhstan, and Tunisia will be hit with 25% tariffs, while others like South Africa, Indonesia, Cambodia, and Myanmar face rates between 30% and 40%. Trump shared signed letters detailing the tariffs, noting that adjustments may be considered based on bilateral relations. An executive order signed Monday officially delays the tariff hikes until August 1, citing new information from senior officials. U.S. markets reacted negatively, with the Dow dropping 422 points.
• Tesla stock dropped nearly 7% on Monday, erasing over $68 billion in market value, after CEO Elon Musk announced plans to launch a new political party called the “America Party.” Musk said the party would target a small number of Senate and House seats to influence legislation. Investors reacted negatively, concerned about Musk’s renewed political involvement at a critical time for Tesla, which recently reported a 14% year-over-year decline in Q2 deliveries and faces mounting competition in China. Musk’s political moves have drawn criticism from both investors and former ally Donald Trump, who called the new party idea “ridiculous.”
• On 09/07/2025, In the first wave of tariff letters, U.S. President Donald Trump targeted key Asian allies Japan and South Korea, raising tariffs to 25% on imports from both nations, worsening pressures on their already slowing economies. Japan faces a potential technical recession, while South Korea’s GDP forecast for 2025 has been cut sharply. Both countries rely heavily on exports—autos and steel in particular—to the U.S., their largest and second-largest export markets respectively. Economists warn the new tariffs could reduce Japan’s GDP by 0.1 percentage point by 2026 and further drag South Korea’s economic recovery.
• President Donald Trump announced a 50% tariff on copper imports and signaled more steep, sector-specific tariffs are coming, including a possible 200% duty on pharmaceutical imports. Copper prices surged over 13%, hitting a record high, while U.S. copper miner Freeport-McMoRan’s shares rose 5%. The U.S., which imports nearly half its copper—mostly from Chile—will align copper duties with existing 50% steel and aluminum tariffs. Commerce Secretary Howard Lutnick confirmed the investigation behind the move is complete, and the tariff could be formalized by late July. The copper and pharma tariffs are separate from Trump’s broader reciprocal tariff plan.
• Brazilian President Luiz Inacio Lula da Silva vowed to retaliate after U.S. President Donald Trump imposed a 50% tariff on Brazilian imports, effective August 1. Citing a new Brazilian law allowing proportional countermeasures, Lula said Brazil would respond in kind. Trump’s tariff, up from 10% in April, was partly framed as punishment for Brazil’s prosecution of former President Jair Bolsonaro, Trump’s ally. Lula pushed back, asserting Brazil’s sovereignty and rejecting foreign interference. The Brazilian real dropped over 2% following the announcement. Trump’s letter to Lula was unique among his recent tariff notices, explicitly linking trade penalties to a country’s internal political actions.
• The Federal Reserve kept rates steady at 4.25%–4.5% in June, with officials split on future cuts due to mixed signals from the economy. Some members supported easing based on slowing job growth and weak consumer spending, while others pointed to stubborn inflation and economic resilience. President Trump’s tariffs added uncertainty, but the Fed believes their inflationary impact may be limited if trade deals are reached or supply chains adjust. Despite Trump’s pressure to lower rates, Chair Jerome Powell emphasized a cautious, data-driven approach, leaving room for future moves based on evolving conditions.
• On 11/07/2025, The S&P 500 and Nasdaq closed at record highs on Thursday, gaining 0.27% and 0.09% respectively, despite escalating tariff tensions. President Trump announced 50% tariffs on copper and Brazilian imports, prompting a retaliatory response from Brazil, while tariffs on over 20 other countries are set to begin Aug. 1. Investors appear unfazed, with markets rebounding from spring losses and driven by enthusiasm for AI stocks like Nvidia, which remains valued above $4 trillion. The S&P and Nasdaq are on track for weekly gains, while the Dow lags slightly.
• On 12/07/2025, President Trump announced a 35% tariff on Canadian imports effective Aug. 1, citing retaliation by Ottawa and Canada’s alleged role in fentanyl trafficking. He warned that any further Canadian tariffs would trigger additional U.S. duties, and emphasized that future rates depend on bilateral cooperation. Canada, already facing multiple sectoral tariffs, responded by defending its trade and drug control efforts while pledging to continue negotiations. U.S.-Canada trade tensions have escalated amid a growing deficit and past disputes over steel, autos, and digital taxes.
• On 15/07/2025, India’s consumer inflation eased to 2.1% in June, below expectations, driven by falling food prices, which registered at -1.06%. This marks the eighth consecutive monthly decline and offers more flexibility for the Reserve Bank of India to further ease monetary policy following May’s 50-basis-point rate cut. Economists expect inflation to average 2.5% in the coming months, supported by strong cereal production and favorable weather. However, RBI Governor Sanjay Malhotra cautioned about risks from weather volatility and global tariffs. India is in trade talks with the U.S. ahead of President Trump’s Aug. 1 tariff deadline, with potential 26% duties looming if no agreement is reached.
• President Donald Trump has threatened to impose 100% “secondary tariffs” on countries trading with Russia if Vladimir Putin doesn’t agree to end the Ukraine war within 50 days. The warning came during a White House meeting with NATO’s secretary general and signals a tougher stance from Trump, who also announced new military aid to Ukraine, funded by Europe and delivered through NATO. The proposed tariffs would target Russia’s trade partners like China, India, Brazil, and Turkiye, especially those importing Russian fossil fuels. This marks an escalation in Trump’s previous warnings and sets a September deadline for a ceasefire deal.
• On 16/07/2025, U.S. consumer prices rose 0.3% in June, pushing annual inflation to 2.7%, the highest since February and above the Fed’s 2% target. Core inflation, which excludes food and energy, rose 0.2% monthly and 2.9% annually. While some tariff-sensitive categories like apparel and household furnishings saw price increases, others like vehicles declined, making it unclear how much tariffs are directly impacting inflation. Shelter remained the biggest contributor to overall CPI, rising 3.8% year-over-year. President Trump used the data to pressure the Fed for aggressive rate cuts, calling for a 3-point reduction to save $1 trillion annually.
•  On 17/07/2025, U.K. inflation rose to 3.6% in June, above expectations, driven mainly by higher motor fuel prices and a continued rise in food costs. Core inflation also increased to 3.7%, reflecting persistent price pressures despite a slowing economy. The pound strengthened slightly following the report, as markets reacted to the hotter-than-expected figures. While the Bank of England faces pressure to lower interest rates amid weak economic growth, analysts still anticipate a 25 basis point rate cut in August, especially if upcoming payroll data confirms further economic softness.
• U.S. wholesale prices were flat in June, with the producer price index showing no monthly change, defying expectations of a 0.2% increase. Core PPI also remained unchanged, suggesting limited inflationary pressure despite tariffs. Goods prices rose 0.3%, driven by tariff-sensitive items like communication equipment, while services fell 0.1%, balancing the headline figure. Annually, PPI rose 2.3%—its lowest since September 2024—while core PPI increased 2.6%. Despite inflation still exceeding the Fed’s 2% target, markets see little chance of a rate cut in July, with the Fed adopting a wait-and-see stance on tariff impacts.
• Chinese Premier Li Qiang has urged tighter pricing controls in the electric vehicle sector to curb intense price wars that are driving deflation and hurting profits. He called for better cost monitoring, timely payments to suppliers, and a focus on innovation and quality over price-cutting. The government is increasingly concerned about “involution” — destructive competition in oversupplied sectors like EVs, solar panels, and steel. In May, industrial profits fell 9.1%, with carmaker profits down 11.9% despite rising sales. Li also pushed for stronger domestic consumption and reduced restrictions on household spending. Economists warn that while addressing overcapacity is necessary, production cuts could threaten growth and jobs, making major reforms unlikely.
• On 19/07/2025, President Donald Trump is demanding 15%–20% tariffs on EU imports, escalating pressure in ongoing trade talks, according to the Financial Times. With Trump’s August 1 deadline approaching, negotiations have stalled, dashing EU hopes for a U.K.-style deal with lower tariffs and sector exemptions. Trump has long criticized the EU’s €198 billion goods trade surplus with the U.S., though EU officials argue the overall trade balance evens out when services and investments are included. The news weighed on markets, sending the Dow Jones over 250 points lower.
• On 21/07/2025, As U.S. President Donald Trump’s proposed 30% tariffs on EU imports loom, set to take effect August 1 unless a deal is struck, the U.K. could emerge as a surprising beneficiary. Businesses that once fled post-Brexit Britain for the EU may now consider shifting operations back to the U.K., where trade terms with the U.S. are more favorable. With lower U.S. tariffs—just 10% on cars and reduced duties on steel—the U.K. offers a strategic edge, especially given its surplus manufacturing capacity. According to Alex Altmann of Lubbock Fine, a wide tariff gap could help restore the U.K.’s status as a European manufacturing hub. While Brexit initially hurt U.K. trade, with GDP still estimated to be 5% below where it would have been had Britain stayed in the EU, this new geopolitical shift may open doors for renewed investment and industrial growth.’
• China held its benchmark lending rates steady on Monday, with the 1-year loan prime rate at 3.0% and the 5-year at 3.5%, as the country faces soft economic growth and weak consumer sentiment. Despite Q2 GDP growing 5.2% year-over-year—slightly above expectations—retail sales and other indicators showed signs of slowing momentum. Economists suggest the People’s Bank of China may hold off on rate cuts for now, keeping tools in reserve amid rising external pressures like U.S. tariffs. Analysts at Nomura warn of a potential “demand cliff” in the second half of 2025, predicting GDP growth could slow to 4.0% due to weakening exports, falling property sales, and worsening fiscal conditions in many cities.
• On 22/07/2025, The S&P 500 closed above 6,300 for the first time on Monday, rising 0.14%, while the Nasdaq hit a record high, gaining 0.38%, driven by strong earnings optimism despite ongoing trade concerns. Verizon’s earnings beat helped boost sentiment, with over 85% of reporting S&P 500 companies surpassing expectations so far, and second-quarter earnings growth tracking at 5%. Tech giants like Alphabet and Tesla are expected to be key drivers, with the “Magnificent Seven” projected to post 14% growth versus 3.4% for the rest of the index. Analysts see more market upside, with improving sentiment and reduced inflation fears countering trade tensions.
• On 23/07/2025, U.S. Treasury Secretary Scott Bessent said he expects to negotiate an extension to the current U.S.-China trade truce during talks in Stockholm next week. The 90-day suspension of tariffs, originally set to expire on August 12, followed earlier agreements to de-escalate a heated trade conflict. Bessent expressed optimism about the trade relationship, suggesting discussions will also address China’s manufacturing surplus and oil imports from sanctioned nations. Swedish Prime Minister Ulf Kristersson confirmed the meeting, emphasizing its global economic importance. The talks mark ongoing progress after both sides significantly lowered tariffs from earlier highs.
• President Donald Trump announced a new trade deal with Japan that includes reciprocal 15% tariffs on Japanese exports to the U.S. and a $550 billion investment from Japan into the American economy, with the U.S. claiming 90% of the profits. The agreement will also open Japan’s markets to U.S. cars, trucks, rice, and other agricultural products, which Trump says will create hundreds of thousands of jobs. The deal comes after Trump previously threatened 25% tariffs on Japanese exports starting August 1, raising tensions over Japan’s auto industry, which accounted for 28.3% of its exports in 2024.
• The U.S. and Indonesia have agreed to a trade deal framework under which Indonesia will eliminate most tariffs on American imports, while the U.S. will impose a 19% tariff on Indonesian goods—down from the 32% rate originally planned under Trump’s “liberation day” tariff initiative. The framework, part of a broader “Agreement on Reciprocal Trade,” includes planned commercial deals such as a $3.2 billion aircraft purchase and $15 billion in U.S. energy exports. The two countries will finalize and sign the agreement in the coming weeks, addressing non-tariff barriers and expanding market access.
• On 24/07/2025, U.S. President Donald Trump will visit the Federal Reserve on Thursday, marking the first official presidential trip to the central bank in nearly 20 years. This rare move underscores Trump’s escalating criticism of Fed Chair Jerome Powell, whom he blames for not cutting interest rates. Though he has publicly floated firing Powell, Trump later walked back the idea, citing legal limits. The visit is widely seen as a symbolic challenge to the Fed’s independence, which presidents have traditionally respected.
• Tesla reported a 16% drop in automotive revenue for Q2, missing analyst expectations with earnings per share of $0.40 (vs. $0.43 expected) and revenue of $22.5B (vs. $22.74B expected). Auto revenue fell to $16.7B from $19.9B a year ago, with regulatory credit sales down to $439M. Vehicle deliveries declined 14% YoY to 384,000. CEO Elon Musk warned of potentially “rough quarters,” citing tariffs, expiring EV tax credits, and political backlash tied to his support for Trump and Germany’s AfD. Tesla stock, down 18% YTD, fell over 4% after hours following concerns about limited U.S. supply and uncertain delivery timelines.
• On 25/07/2025, U.S. jobless claims fell for the sixth consecutive week, dropping to 217,000—below analyst expectations and the lowest since mid-April—indicating ongoing labor market resilience. Despite concerns over President Trump’s economic policies and tariffs, employers added 147,000 jobs in June, and unemployment dipped to 4.1%. However, economists warn that extended tariffs may hurt hiring and fuel inflation. Major companies like Microsoft, Meta, and Starbucks have announced layoffs this year, though the four-week average of claims also declined, and ongoing unemployment claims remained steady at 1.96 million.
• On 29/07/2025, Senior U.S. and Chinese officials are meeting in Stockholm to negotiate a trade truce ahead of an August 12 deadline that could otherwise trigger tariffs exceeding 100%. The talks, led by U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, follow months of escalating tariffs and aim to prevent further disruption to global supply chains. While no major breakthroughs are expected, the talks could pave the way for a future meeting between President Trump and President Xi. China is likely to push for tariff reductions and eased tech export restrictions, while the U.S. seeks economic rebalancing from China and possibly an extension of the truce deadline.
• A U.S. trade court has declined to block former President Donald Trump’s removal of the de minimis tariff exemption, which had allowed duty-free imports under $800—an exemption that benefited companies like Detroit Axle and Chinese retailers such as Shein and Temu. The court ruled that Detroit Axle’s lawsuit overlaps with a broader case, V.O.S. Selections v. Trump, which already challenges Trump’s tariffs and is currently under review by a federal appeals court. Detroit Axle claims the abrupt policy shift, particularly Trump’s April order targeting Chinese shipments, threatens its business model, which relied on tax-free imports through a Mexico facility. Facing tariffs up to 72.5%, the company said it cannot sustain operations, and has begun layoffs and warehouse closures, citing severe supply chain disruptions and unsustainable costs.
• On 30/07/2025, Australia’s Q2 2025 headline inflation eased to 2.1% year-over-year — its lowest since March 2021 and below expectations — edging close to the Reserve Bank of Australia’s 2%–3% target range. Quarterly inflation slowed to 0.7%, driven by rises in housing, food, and health costs, partially offset by falling transport prices. The soft print strengthens market expectations for an August 25 bps rate cut from the current 3.85%, with Bank of America and Commonwealth Bank analysts saying the data “rubber stamps” the move. While the RBA has cut rates twice this year, it paused in July to confirm inflation’s trajectory amid stronger-than-forecast demand and a still-tight labor market. Weak GDP growth of 1.3% year-over-year and rising unemployment to 4.3% add to the case for further easing, with AMP forecasting rates could drop to 2.85% by mid-2026.
• U.S. and Chinese negotiators wrapped up their third round of trade talks in Stockholm without finalizing an extension to their 90-day tariff pause, saying the decision rests with President Donald Trump. The current truce, covering most “reciprocal” U.S. tariffs on Chinese goods and Beijing’s retaliatory measures, expires Aug. 12, after which U.S. tariffs could revert to April’s elevated levels. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer said they would brief Trump, who expressed optimism about the talks. The pause was first agreed in May following Trump’s threats to impose tariffs as high as 125% on Chinese goods, in addition to existing duties including 20% fentanyl-related tariffs. While both sides have refined their positions and improved mutual understanding, the U.S. remains unhappy with China’s ongoing oil purchases from Iran, despite Trump’s earlier approval.
• On 31/07/2025, President Donald Trump announced a “full and complete” trade deal with South Korea, setting blanket U.S. tariffs on Korean exports at 15%, down from the 25% previously threatened, and cutting auto tariffs from 25% to 15%. Trump said Seoul would provide $350 billion for U.S.-controlled investments, though South Korea’s President Lee Jae-myung framed the fund as supporting Korean firms’ entry into U.S. industries like shipbuilding, semiconductors, and batteries. The deal also includes $100 billion in U.S. LNG and energy purchases, with further investment details to be revealed at an upcoming summit. While Korea resisted opening its beef and rice markets, it gained no concessions on steel or semiconductors, and U.S. goods will face no tariffs. Analysts noted the agreement mirrors Japan’s recent deal with Washington, suggesting competitive pressure drove Seoul’s negotiations. The pact may undermine the 2012 U.S.-Korea free trade agreement, as tariff-free treatment for U.S. goods remains while Korea faces 15% duties. Markets reacted modestly, with Korea’s Kospi up 0.5% and 10-year bond yields slightly higher.
• Private sector hiring in the U.S. rebounded strongly in July, with ADP reporting a seasonally adjusted gain of 104,000 jobs, beating expectations for 64,000 and reversing June’s revised loss of 23,000. The increase, the strongest since March, suggests the labor market remains resilient despite concerns over President Donald Trump’s tariffs. Leisure and hospitality led job gains with 46,000 hires, followed by financial activities (28,000), trade/transportation/utilities (18,000), and construction (15,000), while education and health services lost 38,000 jobs. Medium and large businesses each added 46,000 jobs, while small firms contributed 12,000. Wages rose 4.4% annually. The data precedes Friday’s official nonfarm payrolls report, with economists expecting 100,000 new jobs and unemployment ticking up to 4.2%.
• The Federal Reserve voted 9-2 to keep its benchmark interest rate at 4.25%-4.5%, with dissent from Governors Michelle Bowman and Christopher Waller, who urged cuts amid controlled inflation and potential labor market weakness. In its statement, the Fed noted slower growth, elevated uncertainty, low unemployment, and persistent inflation. Chair Jerome Powell said no decision had been made on a September cut, stressing inflation risks, including tariffs. Market odds of a September cut fell from 64% to 46% after his remarks, though some analysts still expect easing if jobs data weaken.