Economic Data: A Slower Pulse
Last week’s economic data delivered a sharp reminder that momentum in the U.S. economy is neither guaranteed nor evenly distributed. Retail sales fell by 0.9% month over month—a significant drop that defied expectations and raised concerns about consumer confidence heading into the second half of the year. While analysts often discount a single month’s data as noise, this contraction feels more meaningful in the context of broader softening across multiple sectors.
Adding to that narrative, housing starts plummeted 9.8%, an alarming signal from an industry that typically leads economic recoveries. High interest rates, elevated construction costs, and sluggish demand appear to be dragging the housing sector into a slowdown. This isn’t just about fewer homes breaking ground. It’s about builders stepping back, buyers getting priced out, and the multiplier effect—jobs, materials, local tax revenue—beginning to run in reverse.
The Federal Reserve, as expected, held its benchmark rate steady at 4.25–4.50%. The tone from Chair Powell was cautious, bordering on defensive. The Fed acknowledges that growth is weakening, but inflation hasn’t cooled fast enough to warrant rate cuts. So we remain in a holding pattern: policy on pause, growth faltering, and the market suspended in an uneasy middle ground.
Looking Ahead: Signals on the Horizon
This week will offer more clarity, with key data releases on the schedule: the latest PMIs, housing price indices, and the third estimate of first-quarter GDP. These reports won’t just offer a snapshot—they’ll help determine whether the recent weakness was a blip or the beginning of a broader trend.
The Purchasing Managers' Index will shed light on whether manufacturing and services activity remains resilient or is starting to contract. Housing price data may confirm whether demand is faltering across the board or if regional disparities continue to define the real estate landscape. The final GDP reading for Q1 is expected to show modest growth, but even a minor downward revision could tilt sentiment toward caution—or outright concern.
All of this comes at a time when equity valuations remain elevated. Earnings growth, already slowing, now faces margin pressures from tariffs, wages, and consumer fatigue. Investors looking for returns in this environment will need to dig deeper—and think globally.
Tariffs and Trade: The Hidden Tax Surge
Amid the headlines about interest rates and inflation, one number stood out like a flashing red warning light: $60 billion. That’s how much the federal government collected in tariffs in just the first five months of 2025—nearly double the same period in 2024. This surge in revenue is no accident. It’s the direct result of sweeping tariff hikes, including a baseline 10% rate on nearly all imports and targeted levies on specific countries and sectors.
Here’s the issue: this money isn’t coming from foreign exporters. It’s coming from American businesses and, ultimately, American consumers. Import prices, excluding fuel, rose 0.3% in May and are up 0.8% for the year—even before tariffs are layered in. That suggests foreign suppliers are holding firm on pricing. With the trade-weighted dollar down nearly 7% in 2025, overseas companies are already earning less in local currency per dollar of U.S. revenue. They simply don’t have the margin to cut prices.
The real impact of these tariffs? Shrinking margins for American companies, higher costs for households, and less purchasing power all around. Tariffs may deliver revenue to the Treasury, but they extract value from the broader economy. They are, in effect, a hidden tax that rarely makes headlines but always hits wallets.
Geopolitical Shock: Iran Bombing and Market Ripples
Layered atop these economic pressures is the growing weight of geopolitical risk. Late last week, Israel launched a series of airstrikes targeting key Iranian nuclear infrastructure. The operation was strategic, not symbolic: initial reports suggest it disrupted critical components of Iran’s enrichment facilities. In the immediate aftermath, markets jolted. Gold surged as investors rushed toward safety. Oil prices spiked over 7% in a single day, given that Iran contributes roughly 4% to global oil production.
The world is watching for Iran’s response. Will it be swift and symmetrical? Delayed and asymmetric? No one knows. But the potential for escalation is real—and rising.
This is a classic “exogenous shock” scenario: an event unrelated to domestic fundamentals that nevertheless alters the trajectory of inflation, energy markets, and even monetary policy. If oil prices continue to rise, the Fed’s job becomes exponentially harder. It’s not just about core inflation anymore—it’s about headline inflation, energy affordability, and consumer psychology.
Investors should recognize that geopolitical risk isn’t theoretical. It’s active, real, and potentially market-moving. Diversification and risk management aren’t academic exercises—they’re strategic imperatives in times like these.
Wisdom for the Week: Marcus Aurelius and the Long Way Around
“You could enjoy this very moment all the things you are praying to reach by taking the long way around—if you’d stop depriving yourself of them.” —Marcus Aurelius, Meditations 12.1
Stoic philosophy has a way of slicing through the noise. In a world obsessed with the next goal, the next promotion, the next portfolio benchmark, Aurelius reminds us: the things we chase—freedom, happiness, respect—are already within our grasp.
We tell ourselves we’ll be happy once. Once the loan is paid off. Once the markets stabilize. Once we retire. Once we hit that net worth number. But what if the real victory isn’t at the end of a ten-year grind? What if it’s in the decision to choose joy now? To lead with integrity now? To live purposefully now?
Financial planning isn’t just about someday. It’s about today. If we wait until life is “perfect” to live well, we may wait forever.
Planning Spotlight: Marriage, Money, and Mid-Year Moves
With wedding season in full swing, now’s the time to talk about how love and tax law intersect. Getting married changes more than your status on Facebook—it changes your filing status, your insurance options, and your entire financial picture.
First, update your name and address with the Social Security Administration and the IRS. File Form 8822 if you’ve moved. Update every financial institution and insurance provider you work with. Don’t just call—send certified mail to guarantee it gets processed.
Your marital status as of December 31 determines your filing status for the entire year. That means even a New Year’s Eve wedding changes how you file for 2025. Update your W-4 to reflect the new status and double-check how this impacts withholdings and estimated taxes.
If you or your spouse have health insurance through the marketplace, notify them immediately. Changes in marital status can dramatically alter your premium subsidies, and failure to report can result in either surprise bills or forfeited assistance. Also review whether either spouse is now eligible for coverage through the other’s employer.
Don’t forget to revisit estate planning documents and beneficiary designations. Retirement plans, life insurance policies, and powers of attorney all need to reflect your new situation. Neglecting this can leave assets stranded or misdirected.
And finally, credit scores don’t merge. Each person keeps their individual credit report. But lenders will pull both scores when you apply for joint financing. Order your free credit reports, monitor them carefully, and make sure you’re aligned before making any big joint purchases.
Looking Back to Look Ahead: Legacy and the Meaning We Leave
Elaine Floyd, CFP®, offers a powerful reminder: legacy is not limited to financial accounts or real estate. It’s the story you leave behind. It’s the wisdom, humor, and hard-earned lessons that live on in the people you love.
Start by writing down simple things: family trees, names, places, dates. Then tell the stories. How you got through a layoff. What you learned from losing a parent. What it felt like to raise kids or run a business. The skills that were passed down to you—and the ones you hope to pass along.
This isn’t about creating a bestselling memoir. It’s about letting your children and grandchildren know who you were beyond numbers on a balance sheet. Videos, journals, handwritten letters—all of these can carry your voice into the future. That’s legacy in its truest form: not just wealth, but meaning.
Read Elaine's full articleHERE.
Independence Day Office Closure: Planning for Time Off and Reflection
As we approach the Fourth of July, we at Mission Financial Planners are taking time to reflect on the meaning of independence—not just as citizens, but as individuals making daily choices about how we live, lead, and plan.
Our office will be closed next week from Monday, June 30 through Friday, July 4 so that our team can enjoy the holiday with family and friends. We will return to normal operations on Monday, July 7.
This isn’t just a calendar update—it’s a chance for all of us to unplug, reflect, and appreciate the freedoms we often take for granted. The Declaration of Independence was signed in the middle of a war, by people risking everything for a vision they believed in. That vision—imperfect, evolving, and still unfinished—reminds us that freedom is never just inherited. It’s practiced, refined, and reaffirmed.
As you enjoy fireworks, BBQs, or maybe just some quiet time, we invite you to reflect on your own independence—financial and otherwise—and how you’re choosing to shape your future.
Final Thoughts: Risk, Reward, and the Choices We Make
The world is noisy right now. Economic data is mixed. Markets are twitchy. Geopolitical risk is real. But underneath it all, the fundamentals of long-term planning haven’t changed. Build discipline. Diversify intelligently. Take risk where it’s rewarded and defend what matters most.
This week’s story is one of vigilance, perspective, and intentionality. Whether you’re thinking about where to invest, when to retire, or how to pass on your story to the next generation, remember: you don’t have to take the long way around.
We’re here to help you chart a course forward—and walk it with you.
Until then, Happy Fourth of July.