Guest article by Max from UNFTR
Fresh off his trip defending Russia’s interests with other world leaders at the G7 and only days after sleeping through his big boy military birthday parade, President Trump is back in D.C. to kick up dust on Truth Social, whip up war fever in the Middle East, and generally keep everyone distracted so the ghouls in the Senate can finish their work gutting the American economy and destroying the U.S. consumer.
A good rule of thumb whenever there are military operations grabbing the headlines is to look at which ones are being suppressed. In this case, we had an increasing stream of negative economic news coming out of various agencies ahead of Fed Chair Jerome Powell’s remarks.

The first release Tuesday was worse-than-expected retail and food sales for May, which were down 0.9 percent from the previous month. Spending had peaked in March ahead of Trump’s much-ballyhooed Liberation Day in April, which sent panic through the global financial markets and started a selloff of U.S. financial assets. The biggest soft spot in the data was in the auto sector, with Americans beginning to back off automobile purchases. It’s important to note that prices haven’t even started to really jump due to the Trump tariffs, so this isn’t welcome news in one of the leading U.S. manufacturing sectors, as it stands to only worsen as the year progresses.
Import-export figures were also released for May, with prices for nonfuel imports advancing 0.3 percent in May on top of an increase of 0.4 percent in April. Higher prices for industrial supplies led the way, which offset decreases in food and beverage. With the dollar continuing to trade below average and imports on industrial materials increasing, we’re months—if not several weeks—away from these inputs really showing up in inflation data. It’s one of the reasons the Fed is in such a pickle right now, because all leading indicators are showing that inputs are increasing.
With certain major retailers already admitting to price hikes on consumer goods, it’s more tough news for the Trump administration as the trade talks stagnate abroad. Compounding the import inflation was a decrease in prices for U.S. exports of 0.9 percent in May, the largest single-month decline since 2023.
This means we’re paying more for what’s coming in and getting paid less for what’s going out.
It’s a tough road ahead for U.S. manufacturing if prices for raw materials and industrial goods are increasing and we’re getting less on finished goods and other U.S. exports. We’re starting to get a sense of the damage to the real economy after data were perverted by the tariff announcements, with consumers, retailers, wholesalers, and suppliers all loading up on inventory earlier in the year as they braced for the tariff storm.
On balance, all of the hard industrial and retail data were worse than economists hoped and predicted.
Over to housing, there is an even bigger storm brewing. The recent HMI survey shows that 37% of builders reported cutting prices in June, the largest percentage since the numbers have been tracked. That would be good news if people could afford to get a mortgage these days, but with spiraling consumer debt and stubbornly high mortgage rates, we’re stuck in a housing doom loop.
The average price reduction in June was 5%, which is a continuation of the trend since November of last year, even with a 62% increase in sales incentives. This is sentiment data, so we’re going to get more information out shortly, but housing is shaping up to be a significant headwind story for the U.S. economy.
This has many beginning to compare and contrast the housing market today to 2007, when cracks began to appear prior to the collapse. And there are pockets of the United States that are seeing dramatic reversals in housing prices, skyrocketing inventories, and houses staying on the market longer. Cities like Austin and Phoenix and large swaths of Florida are experiencing an exodus due to an affordability and housing shortage crisis that is spreading rapidly across the United States—especially in parts of the country that saw their populations balloon during COVID.
The picture is emerging of a U.S. consumer who is stretched to the absolute max. Mortgage balances shown on consumer credit reports grew by $199 billion during the first quarter of 2025 and totaled $12.80 trillion at the end of March. HELOC balances rose by $6 billion, the twelfth consecutive quarterly increase, so now there are $402 billion in outstanding HELOC balances. Consumers are looking everywhere for liquidity, and this is just the segment of the population fortunate enough to own a home and have equity in it.
As much as Trump wants to excoriate the Fed for not dropping rates, on the stuff that matters to consumers, this is more of a Trump problem than a Fed problem. Mortgage rates are tied to the Ten-Year U.S. Treasury, not the federal funds rate, though there is certainly some overlap. According to Redfin data, the average mortgage rate is holding around 6.8%, average home prices are creeping higher, but absolute sales are down. This is the calm before the storm because the Ten-Year Treasury is influenced by the tariff war, the Moody’s credit downgrade on U.S. credit, and the selloff of U.S. debt because the world is losing confidence in our ability to manage the economy. There’s literally nothing on the horizon to save the housing data.
These aren’t the big headline numbers that grab all the attention in the media. And with the prospect of the U.S. being dragged into a completely preventable war between Israel and Iran, the real economy tends to take a back seat to the attention economy. What they really want you to divert your eyes from, of course, is the Senate Finance Committee's response to the House version of the Big Beautiful Bill Act. The impact on low-income households—and especially on red state budgets—is even worse than the original print of the bill and spells disaster for the economy.
The newly released Senate bill takes an even bigger swing at Medicaid that would have far-reaching consequences for low-income Americans. Unlike the House version, this Senate proposal implements much deeper cuts to Medicaid funding, using these savings to help preserve clean-energy tax credits. That sounds lovely until you realize that this is the part that benefits Elon Musk specifically—so don’t think for a moment that they’re doing this out of the goodness of their hearts. There’s also an absurd amount of Wall Street investment money pegged to those tax credits.
The most notable change in the bill involves expanding work requirements beyond what the House had proposed. While the House bill only required childless adults to work or volunteer at least 80 hours per month to maintain Medicaid eligibility, the Senate version extends this requirement to parents with children over age 14. This expansion significantly broadens the number of people who could potentially lose their healthcare coverage if they're unable to meet the work requirements.
The bill also restricts states' ability to finance their Medicaid programs by imposing tighter regulations on how they can tax healthcare providers and use those funds for Medicaid reimbursements. Combined with reduced federal funding for states that expanded Medicaid, these changes create a perfect storm of financial pressure on state healthcare systems.
The Congressional Budget Office (CBO) projects these combined measures could result in up to 11 million more Americans becoming uninsured by 2034. Families with teenage children face particular risk under the new work requirements for parents. Meanwhile, states will likely be forced to make difficult choices between cutting healthcare services, reducing payments to hospitals, or scrambling to find new revenue sources to fill the budget gaps left by reduced federal support.
The reason the GOP is looking for ways to reduce spending is because the portion of the budget that goes toward interest on our debt is nearly one trillion dollars in the proposed budget. This is what has led to the global flight to safety assets like gold and even more speculative assets like Bitcoin, along with a flight to foreign treasuries and asset classes. There is a massive shift underway in the global economy right now because central banks, investment banks, sovereign wealth funds, pensions—pretty much any large pool of investment capital—is flowing out of the U.S.
The way the United States tracks this is through something called TIC data. This stands for Treasury International Capital, and it measures how much money is leaving the U.S. versus how much is coming in. Every day, trillions of dollars move through the global economy, and central banks like the Fed make decisions based on certain trends. And this will illustrate why Fed policy is more difficult now than Trump thinks. No amount of berating Jerome Powell is going to fix the reputational damage the President and the GOP have done to the U.S. economy in such a short period of time. As the saying goes, the markets take the stairs up and the elevator down.
The bottom line is that nearly every asset class in the United States has experienced a net outflow since Liberation Day. Treasury Bonds, Government Agency Bonds, and U.S. Equities have all seen reduced investments from foreign sources. The only area that increased was the purchase of U.S. corporate bonds. Curious, no?
Right at the exact moment the world started trimming U.S. Treasuries, U.S. Equities, and Agency Bonds—and the entire world was predicting a global recession in 2025 led by the United States—foreign investors suddenly decided that U.S. corporation debt was the best bet?
Not a chance.
We know from the Panama Papers that there is about $11 trillion being held offshore by global corporations and wealthy individuals, and of that amount it’s estimated that $4 trillion worth is from the United States. Further, a 2018 study found that 73% of Fortune 500 companies operated subsidiaries in these tax haven countries.
So here’s what the TIC data reveal: there is a massive liquidity problem in the United States in that Trump’s chaos has forced investors to flee from U.S. assets to foreign assets. So when corporate America has to refinance its debt, they’re purchasing their own bonds from their offshore tax haven subsidiaries. This is a self-dealing Ponzi scheme that can only go on for so long.
While U.S. capital flows from the country and into foreign assets, the GOP is digging into the wallets of the average American who is already underwater. As prices increase on goods inside the United States, American manufacturers are getting paid less for what we export. And as corporations continue to hide trillions of dollars in offshore accounts to run a shadow credit economy, the GOP is gutting the IRS to make sure we can’t hold them accountable.
No wonder he was so excited about the war in Iran. Look away. Nothing to see here.
Max is a contributor to the MeidasTouch Network and President of UNFTR Media.
For deeper dives into socioeconomic and economic news check out our YouTube channel @unftr and visit UNFTR.com to sign up for our free weekly newsletter.
Retail Trade Data
https://www.census.gov/retail/sales.html
Manufacturing & Trade
https://www.census.gov/mtis/www/data/pdf/mtis_current.pdf
US Import & Export
https://www.bls.gov/news.release/pdf/ximpim.pdf
Senate Bill
https://www.nytimes.com/2025/06/16/us/politics/senate-bill-medicaid-cuts.html
Housing Index
https://www.nahb.org/news-and-economics/housing-economics/indices/housing-market-index
Household Debt
https://www.newyorkfed.org/microeconomics/hhdc
TIC Data
https://home.treasury.gov/news/press-releases/sb0144
RedFin Housing Data
https://www.redfin.com/us-housing-market