Monthly Economic Headlines

July 11, 2025

July economic headlines

Tensions in the Middle East increase volatility and risk.

Energy prices surged mid-June as Israel and Iran entered into war. While a ceasefire reached on June 24 appears to be holding, conditions remain fragile and a return to violence could lead to disrupted trade flows, higher oil prices, weaker global economic growth, volatile bond and stock markets, and increased geopolitical tensions with Russia and China. Oil prices returned to the middle of their six-month trading range following the ceasefire.

Tariffs continue to disrupt business conditions.

The Trump Administration’s threat and application of tariffs continue, resulting in ongoing geopolitical tensions and uncertainty for businesses dependent on international trade. The administration’s efforts to improve the competitiveness of U.S. producers are likely not finished yet. Conditions will remain uncertain for the foreseeable future.

Trade policy continues to evolve.

The Trump Administration’s approach to addressing trade imbalances has led to heightened business uncertainty, market volatility, inflation concerns and increased tensions with other countries. Although the U.S. and China have reached a tentative trade agreement as of the writing of this report, it remains unclear if/when it will go into effect. Negotiations with other partners are ongoing and their status generally remains unclear.

Spending bill progresses through Congress.

The 2026 federal budget proposal, also known as the One Big Beautiful Bill Act (the Bill), passed through Congress and is set to be signed by President Trump at the writing of this report. The Bill will avert a $4 trillion tax hike on Americans, reform social programs, promote a pro-business environment and expand state and local tax deductions. The signing helps to avoid a default on U.S. Treasury debt, and thus a sharp increase in interest rates and volatility.

Fed policy remains unchanged, but markets suggest rate cuts are coming.

The Federal Reserve (Fed) maintained its current policy stance in its June 2025 meeting, noting solid economic growth and a strong labor market. Federal funds futures markets indicate that policy rates could come down to 3.75-4% by the end of the year (see table below). Fed projections currently show the effective federal funds rate could reach 3.9% by year end in 2025, 3.4% in 2026 and 3.1% in 2027.

Projected Fed Funds Rate

Source: CME Group FedWatch Tool. Data as of July 7, 2025.

Data and trends

This section presents select economic indicators to help producers gauge the direction of their business. These metrics reflect current market dynamics and their potential impact on operations. Come back each month to stay informed and adapt swiftly to the ever-changing economic landscape.

WTI crude oil and diesel prices

Source: U.S. Energy Information Agency.

Observation: Energy prices spiked through mid-June due to the war between Israel and Iran but soon fell back to their six-month trading range after the ceasefire. Please see the Spotlight for a deeper dive into energy markets.

About this indicator: The West Texas Intermediate (WTI) crude oil price is a benchmark for oil pricing and influences the cost of fuels like diesel, which is essential for running farm equipment and transporting goods.

DXY Index

Source: Bloomberg.

Observation: Concerns about the fiscal and economic health of the U.S., trade uncertainty and increased expectations for Fed rate cuts are weighing on the dollar. The DXY Index had its worst first half of the year since 1973.

About this indicator: The DXY index measures the strength of the U.S. dollar against a basket of foreign currencies. The strength of the U.S. dollar impacts the competitiveness of agriculture producers in foreign markets. As the dollar strengthens, U.S. producers & exports become less competitive, and vice versa.

Transportation price indices

Source: Bloomberg. Freightos. U.S. Bureau of Labor Statistics.

Observation: Container rates rebounded in May and June largely due to companies front-loading shipments to the U.S. ahead of tariffs. Dry bulk rates were volatile, rising and falling based on iron ore and grain demand. Trucking rates were flat in June.

About this indicator: The long-haul trucking index measures the changes in trucking freight rates over time. The Baltic Dry Index measures the average global cost of shipping bulk materials, including grains, sugar, metals, and others. The container index measures the average global cost of shipping containers. Shipping prices vary by route and carrier size based on market dynamics and may move independently from global averages (i.e., the cost to ship goods from the West Coast to Asia could remain flat even if global rates are increasing).

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