Morning Report: Markets shrug off tariff noise

Posted on July 9, 2025 by Brent Nyitray

Vital Statistics:

Stocks are higher this morning despite trade tensions. Bonds and MBS are down small.

We have a $39 billion 10-year auction this afternoon, along with the Fed minutes at 2:00 pm. We could see some movement in rates surrounding these events.

Donald Trump is threatening to impose 50% tariffs on copper and a potential 200% tariff on pharmaceuticals if several countries don’t agree to a deal. “We will be releasing a minimum of 7 Countries having to do with trade, tomorrow morning, with an additional number of Countries being released in the afternoon,” he posted on Truth Social late Tuesday. That said, these tariffs won’t go into effect for a year, in order to give companies time to re-shore their businesses in the US. Copper futures soared on the news, however they are giving back some of these gains.

The tariffs on Japan and South Korea won’t be as impactful as feared since they exempt electronics. Overall, market sentiment seems to be taking the issue in stride, and is confident that some sort of deal will be reached.

Of course this isn’t going to be great for the mortgage and real estate market since it gives the Fed the excuse to maintain an inappropriately tight monetary policy given the current economic numbers.

Inflationary expectations remain well-anchored, according to the New York Fed’s Survey of Consumer Expectations. The one-year ahead estimate fell 0.2% to 3%, while the 3 year estimate was unchanged at 3%. The 5 year remained at 2.6%. If you look at a long-term graph, we are pretty close to historical averages:

When the Fed talks about “inflationary expectations remaining well-anchored” the above graph is what they are talking about.

Lost in all of the current inflation discussion is that the real Fed Funds rate has been increasing since Trump took office. This is because the Fed Funds rate has been static, while inflation has fallen. The chart below shows that the real Fed Funds rate (FF effective rate minus core CPI) has risen from 1.04% to 1.56% since January.

Mortgage applications rose 9.4% last week as purchases and refis rose by the same amount. Last week included an adjustment for the 4th of July. “Mortgage rates moved lower last week, with the 30-year fixed rate decreasing to 6.77 percent, its lowest level in three months. After adjusting for the July 4th holiday, purchase applications increased to the highest level of activity since February 2023 and remained above year-ago levels,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Homebuyer demand is being fueled by increasing housing inventory and moderating home-price growth. The average loan size on a purchase application, at $432,600, was at its lowest since January 2025. The refinance index also increased over the week, with VA refinances in particular up 32 percent.”

Filed under: Economy |

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21 Responses

  1. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on July 9, 2025 at 11:56 am said:

    Apparently, memes are legal again.

    https://www.thetelegraph.com/news/politics/article/appeals-court-overturns-right-wing-influencer-s-20762969.php

    Is he owed some remuneration for this? Can he sue the DOJ prosecutors?

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  2. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on July 10, 2025 at 10:47 pm said:

    Love how this is framed as if Trump is the original sinner here.

    Like

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  3. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on July 11, 2025 at 9:54 am said:

    It takes a heart of stone not to laugh.

    Like

    Reply
  4. jnc4p's avatar
    jnc4p, on July 11, 2025 at 10:51 am said:

    Interesting read:

    Hoodwinked

    How China hijacked climate fears to achieve global supremacy.

    Doomberg
    Jul 08, 2025

    Paid

    “I’d rather betray the world than let the world betray me.” – Cao Cao

    On June 25, US Senator Ted Cruz chaired a remarkable hearing of the Senate Subcommittee on Federal Courts, Oversight, Agency Action, and Federal Rights. The focus was on allegations that the Chinese Communist Party (CCP) financially supports climate activists to hinder American energy development.

    https://newsletter.doomberg.com/p/hoodwinked

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  5. jnc4p's avatar
    jnc4p, on July 11, 2025 at 11:17 am said:

    This will be interesting. NoVA, ever seen this treated as healthcare fraud?

    Justice Dept. Seeks to “Take Down” Pediatric Gender Medicine, Issues Raft of Subpoenas

    At an FTC workshop scrutinizing pediatric gender-transition treatment, a Justice Dept. official announced it had subpoenaed nearly 20 gender clinics, investigating them for fraud and false claims.

    Benjamin Ryan
    Jul 09, 2025

    …

    Several speakers pointed to a common practice of using the billing code “endocrine disorder not otherwise specified” rather than a code specific to treating gender dysphoria as an example of what they characterized as widespread fraud in this medical field.

    https://benryan.substack.com/p/justice-dept-seeks-to-take-down-pediatric

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  6. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on July 11, 2025 at 1:57 pm said:

    Serious question, what message are they trying to convey with the flag?

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  7. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on July 11, 2025 at 3:53 pm said:

    Amazing!

    During his time as president, as well as when he was a candidate, Trump has cast disaster response in us-versus-them terms more often than any other president in recent times, highlighting his allies’ efforts while criticizing opponents, experts say.

    “Trump is unusually political,” said Claire Rubin, an independent researcher and consultant in emergency management. “The contrast in treatment in California and Texas might be the most glaring example of how these events are politicized.”

    Politics only started with Trump, y’all!

    https://www.reuters.com/business/environment/trumps-texas-visit-highlights-an-us-vs-them-approach-disasters-2025-07-11/?taid=687165131d79070001609e0c&utm_campaign=trueAnthem:+Trending+Content&utm_medium=trueAnthem&utm_source=twitter

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    • Brent Nyitray's avatar
      Brent Nyitray, on July 13, 2025 at 8:57 pm said:

      This dude sounds utterly insufferable.

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      • jnc4p's avatar
        jnc4p, on July 14, 2025 at 9:49 am said:

        “I was one of President Barack Obama’s speechwriters and had an Ivy League degree”

        And there you have it.

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      • jnc4p's avatar
        jnc4p, on July 14, 2025 at 9:51 am said:

        This theory of how to persuade people politically explains a lot of the current problems Democrats have:

        “My frostiness wasn’t personal. It was strategic. Being unfriendly to people who turned down the vaccine felt like the right thing to do. How else could we motivate them to mend their ways?”

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        • Let the mutherfuker burn!'s avatar
          Let the mutherfuker burn!, on July 14, 2025 at 10:05 am said:

          One thing is, and it’s not exclusive to lefties, but does seem more explicit with them, that there are no Good Faith counter arguments. The assumption always seems to be that someone else’s decisions that run counter to what I think is proper, are due to their hatred of their political opposition and therefor not a rational choice, unlike my decisions.

          Like

  10. jnc4p's avatar
    jnc4p, on July 14, 2025 at 12:47 pm said:

    Good cinema substack:

    https://reelbreakdown.substack.com/

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  11. jnc4p's avatar
    jnc4p, on July 17, 2025 at 1:17 pm said:

    I probably wouldn’t have made this policy choice, but reading the Washington Post account of it makes me less sympathetic to the TPS recipients, not more.

    https://www.washingtonpost.com/business/2025/07/17/trump-tps-honduras-nicaragua-deportations/

    The constant attempt by the MSM to construct a narrative to cause a guilt trip over these actions is counter productive.

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    • ScottC's avatar
      ScottC, on July 19, 2025 at 4:17 pm said:

      This is classic:

      “ The administration has also moved to revoke TPS for as many as 900,000 people from Haiti, Venezuela, Afghanistan, Cameroon and Nepal living in the United States, arguing that the programs for nationals of countries facing conflict and environmental disaster was always intended to be temporary.”

      “Arguing” that the program was always supposed to be temporary? “Temporary” is literally in the name of the program!

      These “journalists” are pathetic.

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    • ScottC's avatar
      ScottC, on July 19, 2025 at 4:34 pm said:

      More:

      “Mardoel Hernandez, 57, came by himself to the D.C. area from Honduras at age 21 under the TPS program.”

      This is a lie. TPS only applies to people who are already in the US. No one comes to the US “under the TPS program”.

      More than likely he came to the US illegally, and then took advantage of the program once Honduras was designated as TPS eligible.

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