The ECB's latest Bank Lending Survey (BLS) adds more evidence to the behavior we've already been chronicling from among Europe's and the world's financial institutions. They are increasingly negative on especially consumers. We know what that means, too: jobs. 

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ECB Second Quarter 2025 Bank Lending Survey https://www.ecb.europa.eu/press/pr/date/2025/html/ecb.pr250722~17414c3656.en.html

World Bank Global Economy Set for Weakest Run Since 2008 Outside of Recessions
https://www.worldbank.org/en/news/press-release/2025/06/10/global-economic-prospects-june-2025-press-release

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There are reports HK bankers are already informally discussing how to structure a "bad bank." Earlier today, other reports said monetary authorities in Hong Kong were circulating the "crisis letter." The situation has taken a turn for the serious, a warning to the rest of the world because what HK is trying desperately to come to grips with is the same major problem as everyone else has, where the bubbles and now busts came from in the first place. 

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HKMA's "Crisis Letter"
https://www.hkma.gov.hk/media/eng/publication-and-research/reference-materials/banking/fa03.pdf

Bloomberg Hong Kong Regulators Revive Crisis Playbook to Rescue Landlords
https://www.bloomberg.com/news/newsletters/2025-07-22/hong-kong-regulators-revive-crisis-playbook-to-rescue-landlords

Bloomberg Hong Kong’s $25 Billion Pile of Soured Debt Spurs Talks to Form ‘Bad Bank’
https://www.bloomberg.com/news/articles/2025-07-16/hong-kong-s-25-billion-debt-woe-sparks-talks-on-bad-bank

Fitch Lower HIBOR May Not Fully Address Hong Kong Banks’ Asset Quality Pressure
https://www.fitchratings.com/research/banks/lower-hibor-may-not-fully-address-hong-kong-banks-asset-quality-pressure-19-05-2025

HIBOR rates
https://www.hkab.org.hk/en/rates/hibor

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Payback is finally here? The implications of the latest report on trade suggest we're finally moving far enough away from all the recent distortions to gain a better sense of whether this really is the "main event." One of those warns trade volumes might crash from here. Plus, another critical forward-leaning measure just flashed a recession signal. All of which consistent with market positions. 

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Bloomberg US Container Volumes Set for Sharp Reversal on Tariff Disruption
https://www.bloomberg.com/news/articles/2025-07-21/us-container-volumes-set-for-sharp-reversal-on-tariff-disruption

CNBC Port of Los Angeles sees record container traffic as shippers race to beat Trump’s tariff deadlines
https://www.cnbc.com/2025/07/14/port-of-los-angeles-record-container-traffic-trade-war-shipping-tariffs.html

CNBC In middle of Trump’s trade war, importers hold more cash and move inventory off the books
https://www.cnbc.com/2025/07/14/trump-trade-war-tariffs-supply-chain-inventory-cash.html

CNBC Online shopping sees biggest slowdown in over decade as tariffs disrupt e-commerce: Survey
https://www.cnbc.com/2025/07/01/online-retail-sees-biggest-slowdown-in-decade-tariffs-hit-e-commerce.html

Bloomberg Bessent Says Fed ‘A Little Off,’ Flags Signal From Two-Year Rate
https://www.bloomberg.com/news/articles/2025-07-03/bessent-says-fed-a-little-off-flags-signal-from-two-year-rate

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Moody's latest report on credit market dynamics showed a significant increase in the number of distressed borrowers, primarily those relating to private equity. In addition, bank stats show that while everyone else has forgotten about commercial real estate and its underlying bust, domestic banks have not and have been quietly yet persistently reducing their exposures to it. Participants in both sectors are following the same rule of thumb: avoid defaults at all costs. 

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Bloomberg Fed’s Waller Hints at July Dissent as He Makes Case for Rate Cut
https://www.bloomberg.com/news/articles/2025-07-18/fed-s-waller-says-private-sector-job-worries-drive-rate-cut-call

Bloomberg Waller Says Fed Should Cut Rates Now With Labor Market on Edge
https://www.bloomberg.com/news/articles/2025-07-17/waller-says-fed-should-cut-rates-now-with-labor-market-on-edge

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Two major markets, two VERY different conclusions and outlooks. The diverging views and prices revolve around what really happened in April. Was it a one-off overreaction to tariffs? Or was the deflation confirmation of more than just potential volatility? Both markets are doubling and tripling down on their separate views, each reaching record or near-record levels for them. 

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Only a week after the Reserve Bank of Australia decided to pause its rate cutting series, the Australian government reported a rash of exceptionally weak labor data, including the highest unemployment rate for the country in four years. RBA wasn't alone; the Bank of England is finding out the same in the same hard way. Central bank rate cut pauses aren't unusual, and they almost always end just like this.  

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ONS UK CPI June 2025
https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/june2025

Bloomberg UK Unemployment Increases to 4.7%, Highest Rate in Four Years
https://www.bloomberg.com/news/articles/2025-07-17/uk-firms-cut-jobs-wage-growth-slows-in-cooling-labor-market

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Three months ago, hotel operators were confident that the consumer downturn they were experiencing would end being a relatively quick pain. After the tariff matter was finally settled, Americans would sure go back to spending as they always seemed to. Instead, a whole bunch of critical and alarming data out just today has poured oceans of deflationary cold water on the recovery hope. 

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Reuters Hilton cuts 2025 revenue growth forecast as US travel demand softens
https://www.reuters.com/business/hilton-cuts-2025-revenue-growth-forecast-economic-uncertainty-weighs-2025-04-29/

PRNewswire WYNDHAM HOTELS & RESORTS REPORTS STRONG FIRST QUARTER RESULTS
https://www.prnewswire.com/news-releases/wyndham-hotels--resorts-reports-strong-first-quarter-results-302442939.html

Wyndham lowers 2025 RevPAR expectations amid dampened consumer sentiment
https://www.hoteldive.com/news/wyndham-q1-2025-earnings-lower-revpar/746863/

YahooFinance United, American, Southwest all surge after Delta's outlook lifts fortunes for US airlines
https://finance.yahoo.com/news/united-american-southwest-all-surge-after-deltas-outlook-lifts-fortunes-for-us-airlines-144400677.html

Bloomberg US Producer Prices Stagnated on Decline in Services Costs
https://www.bloomberg.com/news/articles/2025-07-16/us-producer-prices-stagnated-on-decline-in-services-costs

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Five months and little to show for it. Tariffs have been applied for that long, yet consumer prices remain suspiciously tame. The real story isn't the possible pass-through of trade duties, its why that isn't happening on a far broader basis. We got more evidence for why from American bank balance sheets. 

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BLS June 2025 CPI
https://www.bls.gov/news.release/cpi.htm

Bloomberg US Core CPI Rises Less Than Expected Again Despite Tariff Impact
https://www.bloomberg.com/news/articles/2025-07-15/us-core-cpi-rises-less-than-expected-for-a-fifth-straight-month

Bloomberg US 30-Year Yield Tops 5% as Traders Pare Bets on Rate Cuts
https://www.bloomberg.com/news/articles/2025-07-15/treasuries-gain-after-inflation-report-meets-economists-forecast

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Jamie Dimon, CEO of JP Morgan, had some very harsh words and a pointed warning. He said the world was at high risk from tariffs. And while the activities of "his" bank largely agree with the high degree of risk, it's the complete opposite from what Dimon said publicly. This is not the first time this has happened, either. When the risks are greatest, JPM's CEO says one thing while JPM itself does the opposite. 

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JP Morgan letter to shareholders April 2024
https://www.jpmorganchase.com/content/dam/jpmc/jpmorgan-chase-and-co/investor-relations/documents/ceo-letter-to-shareholders-2023.pdf

JP Morgan second quarter 2024 press statement
https://www.jpmorganchase.com/content/dam/jpmc/jpmorgan-chase-and-co/investor-relations/documents/quarterly-earnings/2024/2nd-quarter/36a0b862-cc80-4e28-bf1b-5cfa07dc9637.pdf

Bloomberg JPMorgan’s Dimon Warns Markets Are Complacent on Tariffs
https://www.bloomberg.com/news/articles/2025-07-10/dimon-says-an-eu-us-tariff-framework-needs-to-get-done

Bloomberg Dimon Says Prepare for 4% Yields, Potential Volatility Rise
https://www.bloomberg.com/news/articles/2018-05-08/dimon-says-prepare-for-4-yields-sees-potential-volatility-rise

CNBC Jamie Dimon cautions the 10-year Treasury yield could hit 5%: ‘It’s a higher probability than most people think’
https://www.cnbc.com/2018/08/06/jp-morgans-jamie-dimon-cautions-10-year-treasury-note-rate-to-hit-5-percent.html

Bloomberg Weakest U.S. Bond Auction in Decade Validates Dimon’s Warning
https://www.bloomberg.com/news/articles/2019-05-08/low-yield-bad-seasonals-and-trade-trip-up-u-s-10-year-auction

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Asia is suddenly awash in deflation. Japan is now experiencing it. And while not necessarily new for China, the acceleration downward to producer prices hints at deterioration in demand, overseas as well as locally. It's become a big enough change the government in Beijing crucially appears to shifting its own economic focus, a potentially profound worldwide signal. Oh, and Jamie Dimon.

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