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.

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!

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.

Altos reports that active single-family inventory was up 0.3% week-over-week.
Inventory is now up 33.1% from the seasonal bottom in January and is increasing.   Usually, inventory is up about 20% from the seasonal low by this week in the year.   So, 2025 is seeing a larger than normal pickup in inventory.
The first graph shows the seasonal pattern for active single-family inventory since 2015.
Click on graph for larger image.

The red line is for 2025.  The black line is for 2019.  
Inventory was up 28.7% compared to the same week in 2024 (last week it was up 30.7%), and down 14.1% compared to the same week in 2019 (last week it was down 13.2%). 
This is the highest level since November 2019.
For 2019, this was the week inventory peaked for the year (then moved sideways for several months), so any further increase this year will close to gap to 2019.  It now appears inventory will be close to 2019 levels towards the end of 2025.
This second inventory graph is courtesy of Altos Research.
As of June 27th, inventory was at 831 thousand (7-day average), compared to 829 thousand the prior week. 
Mike Simonsen discusses this data regularly on Youtube

Weekend:
• Schedule for Week of June 29, 2025

Monday:
• At 9:45 AM ET, Chicago Purchasing Managers Index for June.

• At 10:30 AM, Dallas Fed Survey of Manufacturing Activity for June.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 17 and DOW futures are up 212 (fair value).

Oil prices were down over the last week with WTI futures at $65.52 per barrel and Brent at $67.77 per barrel. A year ago, WTI was at $83, and Brent was at $82 - so WTI oil prices are down about 21% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.17 per gallon. A year ago, prices were at $3.49 per gallon, so gasoline prices are down $0.32 year-over-year.

From STR: U.S. hotel results for week ending 21 June

The U.S. hotel industry reported positive year-over-year comparisons, according to CoStar’s latest data through 21 June. ...

15-21 June 2025 (percentage change from comparable week in 2024):

• Occupancy: 70.5% (+1.3%)
• Average daily rate (ADR): US$163.77 (+2.0%)
• Revenue per available room (RevPAR): US$115.39 (+3.3%)
emphasis added

The following graph shows the seasonal pattern for the hotel occupancy rate using the four-week average.
Click on graph for larger image.

The red line is for 2025, blue is the median, and dashed light blue is for 2024.  Dashed purple is for 2018, the record year for hotel occupancy. 
The 4-week average of the occupancy rate is tracking behind both last year and the median rate for the period 2000 through 2024 (Blue).
Note: Y-axis doesn't start at zero to better show the seasonal change.
The 4-week average will increase during the summer travel season; however, we will likely see a hit to occupancy during the summer months due to less international tourism.

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• New Home Sales Decrease to 623,000 Annual Rate in May

• NAR: Existing-Home Sales Increased to 4.03 million SAAR in May; Down 0.7% YoY

• Case-Shiller: National House Price Index Up 2.7% year-over-year in April

• Inflation Adjusted House Prices 1.7% Below 2022 Peak

• Final Look at Local Housing Markets in May and a Look Ahead to June Sales

This is usually published 4 to 6 times a week and provides more in-depth analysis of the housing market.

The key report scheduled for this week is the June employment report to be released on Thursday.

Other key reports include the June ISM Manufacturing survey, June Vehicle Sales and the Trade Deficit for May.

----- Monday, June 30th -----
9:45 AM: Chicago Purchasing Managers Index for June.

10:30 AM: Dallas Fed Survey of Manufacturing Activity for June.

----- Tuesday, July 1st -----
9:30 AM: Discussion, Fed Chair Jerome Powell, Policy Panel Discussion, At the European Central Bank Forum on Central Banking 2025, Sintra, Portugal

10:00 AM: ISM Manufacturing Index for June. The consensus is for the ISM to be at 48.8, up from 48.5 in May. 

10:00 AM: Construction Spending for May. The consensus is for a 0.1% decrease in construction spending.

10:00 AM ET: Job Openings and Labor Turnover Survey for May from the BLS.

This graph shows job openings (black line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.

Jobs openings increased in April to 7.39 million from 7.20 million in March.

The number of job openings were down 3% year-over-year and quits were down 6% year-over-year.

Late in the day: Light vehicle sales for June.

The consensus is for light vehicle sales to be 15.5 million SAAR in June, down from 15.6 million in May (Seasonally Adjusted Annual Rate).

This graph shows light vehicle sales since the BEA started keeping data in 1967. The dashed line is the sales rate for last month.

J.D. Power is forecasting sales of 15.0 million SAAR in June.

----- Wednesday, July 2nd -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:15 AM: The ADP Employment Report for June. This report is for private payrolls only (no government). The consensus is for 110,000 payroll jobs added in June, up from 37,000 in May.

----- Thursday, July 3rd -----
8:30 AM: Employment Report for June.   The consensus is for 129,000 jobs added, and for the unemployment rate to be unchanged at 4.2%.

There were 139,000 jobs added in May, and the unemployment rate was at 4.2%.

This graph shows the jobs added per month since January 2021.

8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for initial claims to increase to 239 thousand from 236 thousand last week.

8:30 AM: Trade Balance report for May from the Census Bureau.

This graph shows the U.S. trade deficit, with and without petroleum, through the most recent report. The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

The consensus is the trade deficit to be $69.8 billion.  The U.S. trade deficit was at $61.6 billion the previous month.

10:00 AM: the ISM Services Index for June.   The consensus is for a reading of 50.8, up from 49.9.

All US markets will close early at 1:00 PM ET in observance of Independence Day

----- Friday, July 4th -----
All US markets will be closed in observance of Independence Day

From the Las Vegas Visitor Authority: May 2025 Las Vegas Visitor Statistics

With headwinds of ongoing economic uncertainty, the destination hosted approximately 3.4 million visitors in May, down ‐6.5% YoY.

Convention attendance reached approx. 511k for the month (up 10.7%), supported in part by show rotations including LightFair International (8,500 attendees), the Bitcoin conference (30k attendees) and the National Automatic Merchandising Association/NAMA Show (5k attendees). Also, a few shows were held in May this year vs. other months last year, including Las Vegas Antique Jewelry & Watch Show (7,500 attendees, held in June last year) and PETZONE360 Live (5k attendees, held in April last year.)

Hotel occupancy reached 83.0% for the month, down ‐3.1 pts with Weekend occupancy of 89.9% (down ‐3.5 pts) and Midweek occupancy of 79.3% (down ‐3.2 pts). ADR for the month reached $198 (‐2.2% YoY) with RevPAR of $165 (‐5.7% YoY).
emphasis added

Click on graph for larger image.

The first graph shows visitor traffic for 2019 (Black), 2020 (dark blue), 2021 (light blue), 2022 (light orange), 2023 (orange), 2024 (dark orange) and 2025 (red).

Visitor traffic was down 6.5% compared to last May.  Visitor traffic was down 7.4% compared to May 2019.
Year-to-date (YTD) visitor traffic is down 6.1% compared to the same period in 2019.

The second graph shows convention traffic.
Convention traffic was up 10.7% compared to May 2024, but down 1.8% compared to May 2019.  
YTD convention traffic is down 5.7% compared to 2019.

There will be additional trade related distortions in Q2 boosting GDP.

From BofA:

Since our last weekly publication, our 2Q GDP tracking is down one-tenth to +2.5% q/q saar. [June 27th estimate]
emphasis added

From Goldman:

We lowered our Q2 GDP tracking estimate by 0.1pp to +3.9% (quarter-over-quarter annualized). Our Q2 domestic final sales estimate stands at 0%. [June 27th estimate]

And from the Atlanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2025 is 2.9 percent on June 27, down from 3.4 percent on June 18. After recent releases from the US Census Bureau and the US Bureau of Economic Analysis, an increase in the nowcast of the contribution of net exports to second-quarter real GDP growth from 2.07 percentage points to 3.49 percentage points was more than offset by a decrease in the nowcasted GDP growth contribution of inventory investment from -0.42 percentage points to -2.22 percentage points. [June 27th estimate]

Today, in the Calculated Risk Real Estate Newsletter: Final Look at Local Housing Markets in May and a Look Ahead to June Sales

A brief excerpt:

After the National Association of Realtors® (NAR) releases the monthly existing home sales report, I pick up additional local market data that is reported after the NAR. This is the final look at local markets in May.

There were several key stories for May:

• Sales NSA are down year-over-year (YoY) through May, and sales last year were the lowest since 1995! The YoY comparisons will be easier the next several months, so sales in 2025 might be close to the level in 2024.

• Sales SA were down YoY for the 4th consecutive month and 41 of the last 45 months.

• Months-of-supply is at the highest level since 2016 (tying one month near the start of the pandemic).

• The median price is barely up YoY, and with the increases in inventory, some regional areas will see more price declines.

Sales at 4.03 million on a Seasonally Adjusted Annual Rate (SAAR) basis were above the consensus estimate; however, housing economist Tom Lawler’s estimate was right on (usually very close).

Sales averaged close to 5.44 million SAAR for the month of May in the 2017-2019 period. So, sales are about 26% below pre-pandemic levels.
...
In May, sales in these markets were down 3.8% YoY. Last month, in April, these same markets were also down 3.8% YoY Not Seasonally Adjusted (NSA). The NAR reported sales in May were down 4.0% YoY NSA, so this sample is close.

Important: There were fewer working days in May 2025 (21) as in May 2024 (22). So, the year-over-year change in the headline SA data was higher than for the NSA data. According to the NAR, seasonally adjusted sales were only down 0.7% YoY in May.
...
More local data coming in July for activity in June!

There is much more in the article.

Here is a graph of the year-over-year change in shelter from the CPI report and housing from the PCE report this morning, both through May 2025.

CPI Shelter was up 3.9% year-over-year in May, down from 4.0% in April, and down from the cycle peak of 8.2% in March 2023.
Housing (PCE) was up 4.1% YoY in May, down from 4.2% in April and down from the cycle peak of 8.3% in April 2023.

Since asking rents are mostly flat year-over-year, these measures will slowly continue to decline over the next year as rents for existing tenants continue to increase.
The second graph shows PCE prices, Core PCE prices and Core ex-housing over the last 3 months (annualized):

Key measures are below the Fed's target on a 3-month basis. 

3-month annualized change:
PCE Price Index: 1.1%
Core PCE Prices: 1.7%
Core minus Housing: 1.1%

There appears to be some residual seasonality, especially in Q1.

From the BEA: Personal Income and Outlays, May 2025

Personal income decreased $109.6 billion (0.4 percent at a monthly rate) in May, according to estimates released today by the U.S. Bureau of Economic Analysis. Disposable personal income (DPI)—personal income less personal current taxes—decreased $125.0 billion (0.6 percent) and personal consumption expenditures (PCE) decreased $29.3 billion (0.1 percent).

Personal outlays—the sum of PCE, personal interest payments, and personal current transfer payments—decreased $27.6 billion in May. Personal saving was $1.01 trillion in May and the personal saving rate—personal saving as a percentage of disposable personal income—was 4.5 percent.

From the preceding month, the PCE price index for May increased 0.1 percent. Excluding food and energy, the PCE price index increased 0.2 percent.

From the same month one year ago, the PCE price index for May increased 2.3 percent. Excluding food and energy, the PCE price index increased 2.7 percent from one year ago.
emphasis added

The May PCE price index increased 2.3 percent year-over-year (YoY), up from 2.1 percent YoY in April, and down from the recent peak of 7.2 percent in June 2022.
The PCE price index, excluding food and energy, increased 2.7 percent YoY, up from 2.5 percent in April, and down from the recent peak of 5.6 percent in February 2022.

The following graph shows real Personal Consumption Expenditures (PCE) through May 2025 (2017 dollars). Note that the y-axis doesn't start at zero to better show the change.

Click on graph for larger image.

The dashed red lines are the quarterly levels for real PCE.

Personal income and PCE were below expectations.
Inflation was above expectations.
Using the two-month method to estimate Q2 real PCE growth, real PCE was increasing at a 2.4% annual rate in Q2 2024. (Using the mid-month method, real PCE was increasing at 2.0%).  This suggests moderate PCE growth in Q2.

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

Friday:
• At 8:30 AM ET: Personal Income and Outlays, May 2024. The consensus is for a 0.4% increase in personal income, and for a 0.3% increase in personal spending. And for the Core PCE price index to increase 0.1%.  PCE prices are expected to be up 2.2% YoY, and core PCE prices up 2.5% YoY.

• At 10:00 AM: University of Michigan's Consumer sentiment index (Final for June).

• At 4:30 PM: Federal Reserve Board announces results from its annual bank stress test