June Sees Rare U.S. Budget Surplus as Tariffs Drive Revenue Spike
The U.S. government posted a $27 billion surplus in June, fueled by a 13% rise in receipts and a surge in tariff collections, which jumped 301% from June 2024. Despite this brief improvement, the year-to-date federal deficit remains high at $1.34 trillion, with interest payments on the $36 trillion debt reaching $749 billion so far. Customs duties brought in $27 billion for the month, boosted by President Trump’s 10% blanket tariff and reciprocal tariffs introduced in April. While Trump pushes for Fed rate cuts to ease debt servicing, his recent spending bill is projected to add $3.4 trillion to the debt over the next decade.
Trump Unleashes Global Tariff Wave, Targeting Canada, EU, and Mexico
Donald Trump announced sweeping new tariffs, including a 35% duty on Canadian imports and 30% tariffs on goods from the European Union and Mexico, all set to take effect on August 1. The moves follow retaliation from Canada and ongoing trade negotiations with the EU and Mexico, with Trump warning that any countermeasures will result in matching tariff hikes. Trump has issued similar letters to 23 countries as part of his push for “reciprocal” trade, building on his April 10% blanket tariff and escalating duties on key U.S. trading partners. While countries like the UK secured early deals to avoid the worst of the increases, others, including Canada and Mexico, are pushing back, calling the measures unfair and economically damaging.
Mortgage Applications Surge as Rates Briefly Dip to 3-Month Low
A temporary decline in mortgage rates sparked a 9.4% jump in total mortgage applications last week, driven equally by gains in both purchase and refinance demand. The average 30-year fixed mortgage rate fell to 6.77%, its lowest in three months, encouraging a 9% increase in refinance activity and a 25% year-over-year rise in purchase applications. Rising housing inventory and easing price growth are contributing to renewed homebuyer interest, though broader market uncertainty and high contract cancellation rates temper optimism. Mortgage rates have started creeping back up since the July Fourth holiday, but they remain near their lowest levels since late April.
