Tariffs didn’t trigger inflation. Shelves never emptied. No recession hit. Markets climbed to fresh all time highs. And now in July 2025, the economy is stronger than it was a year ago. No fluff. Just facts.
Core CPI in June printed at 2.4 %. That’s consistent with trend and nowhere near crisis levels. Retail inventory ratios are back to historical norms. Supply chains have stabilized across most sectors. Wage growth is running at about 4.1 %, enough to keep consumption steady without pressuring prices further.
Second quarter GDP came in at 2.1 % annualized growth. That’s three straight quarters of solid expansion. Consumer spending rose 0.4 % in May. Jobless claims remain low, floating near multi decade averages. Student loan repayment resumed in Q1 but hasn’t dented demand.
The S&P 500 closed July 3 at 6 214. That’s an all time high. More importantly, it wasn’t just tech carrying the rally. Industrials, energy, financials, and materials all moved. That broad participation suggests strength is rooted in the economy, not hype.
Investor crowding is apparent but not manic. Social sentiment is constructive. Reddit, X, and trading forums show steady bullish tilt without overconfidence. Fed fund futures imply the next two meetings are live, with July 30 and 31 now in focus. One hot CPI print or a sharp job report could reset the glidepath, but right now, soft landing expectations still dominate.
Bullish case
• Inflation remains anchored at 2.4 %
• GDP growth steady at 2.1 %
• Jobs market resilient with low claims
• Broad sector leadership in equities
• Healthy consumer spending despite credit tightness
Key levels to monitor
• 6050 holds as first meaningful support
• 6000 is psychological and technical defense line
• upside breakout only resumes cleanly above 6300
With core fundamentals stable but tail risks creeping in from real estate and credit, short term positioning should remain nimble. Watch the bond market. Yields creeping higher without inflation rising is a red flag. CMBS at 3.8 % yield while treasuries offer 4.1 % implies deep risk mispricing.
This is a fully priced market with a tight rope underneath it. Any stumble from the Fed, housing, or inflation could snap sentiment. But for now, the path remains firm.