What Really Happened in June: The Budget Mess, Fed Noise, and Tariff Warnings

Welcome to the first Econ Without the Ego Monthly Update where we break down what really mattered in June 2025. This month: a closer look at the federal budget chaos, Trump’s shots at the Fed, and why

Quick Recap – Here’s What Mattered This Month

Before we dig into the numbers, let’s pause and ask: what really happened this month that affects us, not just markets or headlines, but everyday people?”

The big stories for June are…

• The federal budget. The Big Beautiful Betrayal. No deal yet, but lots of political maneuvering and exposing false promises.

· More Federal Reserve drama. Trump trash-talked the Fed chair, and markets barely flinched.

• Tariffs made noise again. Still no deal. But companies are raising red flags.

Deeper dive on lead stories.

BBB (The Big Beautiful Betrayal) June happenings:

What happened. Details are emerging that provisions are timed to expire or delayed to coincide with current presidential term and congressional elections.

What it means for us. Programs being promoted for tax savings, such as no tax on tips, overtime deductions, and senior standard deduction increases each have a sunset. Any benefit if passed, will be enjoyed and celebrated then expire after current president leaves office and congressional elections. SNAP (food stamp program) savings AKA cuts, they are just a cost shift to states, laying the burden on local government

Reserve. Independence?

What happened. The Fed held rates steady but warned about future hikes. Political noise targeting the Fed chair from Trump added uncertainty.

What’s it mean to us? Federal reserve hesitates to cut rates. Sites concerns of pending inflation from tariffs and growing unemployment rolls. Trump disagrees. Makes me think the threat of increase inflation is real and mortgage rates will stay where they are…for now.

Tariffs.

What happened. Current administration continues to spin progress updates but is still pretty much empty handed. Still no meaningful deals or progress. More/continued economic uncertainty.

What’s it means to us.

Tariff collections paid by US importers are three times higher than their pre trade war levels. Companies are announcing planned price increases and weaker earnings. If this continues, expect increased inflation and declining investment activity (maybe a hit to your retirement savings).

Indicator Watch. What the latest numbers say.

Here’s a quick look at the numbers I always keep an eye on:

· CPI (Inflation): As of the end of May 2025, the annual inflation rate is 2.4%. Compared to a January rate of 3%. The decline corresponds with a drop in energy/oil cost. A decline driven by a drop in global oil demand and too much production. Energy cost deflation more than compensated for slight cost increased in most other areas. Next release Jul 15, 2025. (Update. US Bombs Iran. Impact to price of oil yet to be determined).

• Unemployment: It’s holding steady at 4.2%. (Jun 2025 data will be release Jul 3). Some details of latest employment situation: Most new jobs are in health care and social services due to an aging population. We get older, we need more care. On the downside, the number of new jobless people is creeping up (the newly jobless includes 59,000 former government employees).

• Treasury yields: After declining most of the year, yields are rising again driven by tariff fears and general political instability. We're seeing this reflected in 10 year and 30-year bonds. That means more expensive borrowing for the U.S. and a growing interest expense burden.

Wrap it up. Where Are We Headed?

This isn’t a forecast. It’s a reality check.

Yes, the crystal balls are working overtime but are coming up cloudy to dark skys.

Perhaps the Consumer Conference Board summarized it best in their June 20, 2025 report…

‘The Conference Board does not anticipate recession, but we do expect a significant slowdown in economic growth in 2025 compared to 2024, with real GDP growing at 1.6% this year and persistent tariff effects potentially leading to further deceleration in 2026’

If you want more of my take, check out my explainers and commentaries at Econ Without the Ego on Substack and YouTube.
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Be well,

George