In the Loop – June 20, 2025

“In The Loop” is designed to give you a short update reflecting major developments, earnings, and investment trends across some core Equity Income and Growth holdings. All clients should be aware that individual buy/sell recommendations will be conveyed directly to you on an individual basis. Have a great weekend.

Even though it was a shorten trading week with the markets closed for Juneteenth, there still was plenty of market moving headlines to cover. Let’s start with the Federal Reserve meeting on Wednesday. The Fed kept the target federal funds rate steady at 4.25%–4.50%—marking the fourth consecutive meeting without a rate cut. Our opinion remains the same, we think July will be a live meeting and we think the Fed will lower interest rates multiple times this year. This opinion is based on the weakening jobs data. Unemployment is 4.2%. The Fed will be more focused on this number rising versus inflation. The war with Israel and Iran. Maybe too soon to tell, however, the markets are moving towards a peaceful Middle East without the threat of a nuclear bomb. Lastly, law makers in Washington continue to move legislation that favors buying US Treasuries. U.S. regulators—including the Fed, FDIC, and OCC—met this week to take a deeper look at reducing enhanced Supplementary Leverage Ratio (SLR) requirements, especially for the largest banks. A reduced SLR would increase flexibility for large banks, potentially supporting more lending and liquidity provision. Also, the Senate this week passed the bipartisan GENIUS Act (68–30), establishing the nation’s first federal regulatory framework for U.S. dollar–pegged stablecoins. The bill requires stablecoins to be fully backed by U.S. dollars and Treasuries, includes monthly audits, and enforces consumer protections—steps that Sen. Bill Hagerty (R-TN) says will strengthen the U.S. dollar’s global dominance, increase demand for Treasuries, and ensure crypto innovation remains anchored in the U.S. He also noted that by 2030, stablecoin issuers could become the largest holders of U.S. Treasuries. Short-term this has put pressure on Visa and Mastercard, because large corporations could create their own stable coins to reduce interchange fees. This will take time to materialize.