First Friday: The Dollar Is Weak, Bonds Are Expensive, and We Owe WWII-Level Debt

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Jun 6, 2025

The job market added 139,000 jobs in May, but the bond market is where the real drama unfolds, with yields spiking and the dollar weakening, raising inflation concerns. Tariff tensions linger as court rulings complicate trade dynamics, especially for the whiskey industry. On a regulatory front, potential changes to accredited investor rules could democratize access to private markets. Meanwhile, cryptocurrency news shines as the SEC steps back from treating most crypto as securities, signaling a more favorable environment for digital assets.

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INSIGHT

Job Growth Slows Moderately

The U.S. added 139,000 new jobs in May, beating expectations but showing a slower growth rate compared to April.
This indicates a moderate slowdown in job growth but not as severe as initially anticipated.

INSIGHT

Trade Uncertainty Slows Growth

Trade war uncertainty creates business challenges due to unstable tariff threats, like looming 50% tariffs on the EU.
This environment leads companies to adopt defensive postures, slowing growth and complicating forecasting.

INSIGHT

Treasuries Better Economic Indicator

The stock market is a moody teenager influenced by hopes and fears, not a reliable economy indicator.
Instead, 10-year Treasury yields offer a better economic bellwether reflecting inflation expectations and economic strength.

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#614: The US just added 139,000 new jobs in May. That beat expectations. But the real story isn't in the job numbers — it’s in the bond market.

Something unusual is happening in bonds. Treasury yields are spiking. The dollar is weakening. That combination almost never happens together. And it's signaling concerns about future inflation.

Trade wars continue on. A federal court just struck down some tariffs. The administration will appeal. Meanwhile, the EU has until July 9 to cut a deal. If they don't, 50 percent tariffs kick in. As a result, many companies are playing defense instead of growing.

The debt situation keeps getting worse. We owe $36.2 trillion. That's more than we owed at the end of World War II as a percentage of our economy. Moody's just downgraded our credit rating. We're not alone — Britain's bonds just hit their highest levels since 1998.

The accredited investor rules could finally change. Right now you need an income of $200,000 ($300,000 as a couple) or $1 million in net worth to access private markets. Those numbers haven't changed since they were written in 1982, even though adjusted for inflation, that $200,000 would be $662,000 today.

The SEC might start loosening enforcement of the accredited investor rules. That could open up more investments to people who've been locked out for decades.

Crypto is finding its footing. The SEC dropped cases against Coinbase. They're backing away from treating most crypto like securities. Bitcoin sits near all-time highs. The US keeps building its strategic Bitcoin reserve.

The House just passed what's being called the "One Big Beautiful Bill." It extends 2017 tax cuts. Eliminates taxes on tips and overtime. The Congressional Budget Office says it'll add $2.4 trillion to the deficit over 10 years. That's sparked debate between deficit hawks and growth advocates — including one particularly high-profile debate that has been plastered across the headlines.

Consumer sentiment stays stuck at 2022 lows. People expect 6.6 percent inflation. The actual rate is 2.3 percent. That gap between what the data says and what people feel shows up everywhere.

We cover all of this in today’s First Friday economic update.

For more information, visit the show notes at https://affordanything.com/episode614

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