Daily Brief | July 10 2025

Top News
· The Fed opens the door to cutting the federal funds rate before the end of 2025.
· U.S. President Donald Trump announced a 50% tariff on copper and on imports from Brazil, effective August 1, citing national security and political pressure.
· The Bank of Japan stated that U.S. tariffs have not yet significantly impacted exports but warned of potential future loss of economic confidence.
· In the week ending July 5, initial jobless claims came in at 227,000 (vs. 235,000 expected), down from 232,000 the previous week.
· The Chinese government urged the European Union to tone down accusations regarding market access barriers, amid ongoing trade tensions and calls for greater openness.
Economic Outlook
The Fed opens the door to cutting the federal funds rate before the end of 2025. The minutes acknowledged that it is appropriate to maintain a cautious stance, given the lingering uncertainty about when the effects of tariffs will materialize in prices, as well as their duration and magnitude. Many members noted that the impact could take longer than previously expected, as firms might wait to deplete pre-tariff inventories before adjusting prices. Additionally, recent trade agreements and the ability to adapt supply chains could limit inflationary pressures. Within the Committee, three positions were identified. The majority believes that one or two cuts may be appropriate before year-end, anticipating that inflationary pressures will be transitory, long-term expectations remain anchored, and some moderation in the economy and labor market could emerge. On the other hand, a couple of members—presumably Waller and Bowman—would support a cut as early as the July meeting. Finally, some participants argued in favor of keeping rates unchanged for the remainder of the year, citing that inflation remains above the 2% target and upside risks persist, driven by a rebound in short-term expectations. This divergence suggests that we may see dissents in upcoming decisions, both in statements and votes. Nevertheless, the minutes offer greater clarity regarding the path of monetary policy. We expect a 25-basis-point cut to the federal funds rate at the meeting scheduled for September 17.
Markets and Stocks
U.S. stock futures are trading slightly higher this Thursday, as investors digest President Trump’s recent tariff measures, while the ongoing strength in the tech sector continues to support the market, having pushed the Nasdaq to a new record high the previous day. The strong rally in Nvidia shares offset trade-related concerns. Regarding the latter, Trump confirmed that the 50% tariffs on copper imports and products from Brazil will go into effect on August 1st, in response to trade and political disputes. The Brazilian government responded that it will act in accordance with its reciprocity legislation.
On the corporate front, the market is beginning to shift focus toward the second-quarter earnings season. In this regard, shares of Delta Air Lines rose as its earnings report exceeded expectations.
On the economic front, initial jobless claims surprised to the downside, falling to 227,000, below forecasts.
In the bond market, Treasury yields remain virtually unchanged, as investors closely monitor the evolution of U.S. trade policy and its implications for growth and inflation. The 10-year yield holds at 4.35%, while the 2-year yield stands at 3.87%.
In commodities, oil is moderately lower, with investors weighing the potential negative impact of the new tariffs on global economic activity. In contrast, gold is rising, supported by a pullback in the dollar and increasing expectations of interest rate cuts later this year, amid continued trade uncertainty.
Corporate News
– Shares of Delta Air Lines surged after the airline beat second-quarter revenue and earnings expectations, and reinstated its 2025 profit guidance.
– WK Kellogg saw a strong rally after announcing an acquisition deal with Italian chocolate maker Ferrero, which will pay cash for the entire company, valuing it at over $3 billion.
– Shares of Advanced Micro Devices rose following an upgrade by HSBC, which raised its rating to “buy.” The bank highlighted that higher-than-expected pricing for AMD’s new AI chip could provide a significant boost to revenue.

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