Risk Management
Data released by the US Bureau of Economic Analysis on Thursday showed that inflation picked up in June, with the Personal Consumption Expenditures (PCE) price index rising 2.6% year-on-year, up from 2.4% in May; core PCE rose 2.8% year-on-year, still well above the Fed's 2% long-term target. This data supported the Fed's decision the previous day to keep benchmark interest rates unchanged.
The Federal Reserve announced on Wednesday that it would hold its benchmark rate at 4.25%-4.5%, citing inflation that remains "elevated." Governors Michelle Bowman and Christopher Waller cast rare dissenting votes, advocating for a 25-basis-point cut. Chair Powell stated that the labor market remains solid, but slower economic growth coexists with price pressures, requiring careful policy balancing.
The Federal Reserve kept rates unchanged on Wednesday, drawing mixed reactions from the construction industry. Private projects have slowed due to high financing costs, with contractors responding through diversified portfolios and enhanced pre-construction management; public projects and sectors like data centers remain active. The industry expects possible but slow rate cuts within the year, with labor constraints potentially limiting future rebounds.
Data released by The Conference Board on Tuesday showed that despite signs of weakness in the job market, consumer confidence rose slightly this month, easing recession worries. Nevertheless, consumers' assessment of job availability declined for the seventh consecutive month, falling to the lowest level since March 2021.
The latest EY survey shows that enterprise AI investment continues to climb, with 21% of surveyed enterprises investing over $10 million in AI, a proportion expected to rise to 35% next year. Agentic AI is becoming a new market engine, but data privacy and regulatory gaps remain major obstacles.
According to the July survey by the National Association for Business Economics (NABE), 27% of companies plan to delay hiring or investment over the next six months, and nearly six in ten surveyed economists view a recession as the top risk for the coming year. Although recession concerns have eased compared to May, companies remain cautious about policy uncertainty and rising costs.
According to the latest EY report, despite tariff policy adjustments and stock market volatility, the number of US IPOs in the first half of 2025 still increased by 35% year-on-year to 109, a new high for the same period since 2021; however, total fundraising was $17.1 billion, down 9% from the same period last year. The report states that the global IPO outlook is 'cautiously optimistic,' but a full recovery still depends on key conditions such as trade frameworks, monetary policy, and geopolitical situations.
The Conference Board released a report on Monday stating that U.S. economic growth will slow in the second half of 2025, mainly due to tariffs raising goods prices and weakening consumer confidence. Although the likelihood of a recession is low, GDP growth is expected to decline noticeably from 2024 levels, with an estimated growth of 1.6% this year. The Yale Budget Lab calculates that tariffs will increase the average American household's annual spending by $2,800 and push up the unemployment rate by 0.5 percentage points.
Global commercial real estate services firm JLL released the '2025 Global Space Planning Benchmark Report', indicating that although most companies strengthened return-to-office requirements at the beginning of the year, office space configurations are trending toward compactness: the target area per person has been reduced to 132 square feet, the proportion of shared workstations has increased, and the standard sizes of enclosed offices and open-plan workstations have simultaneously shrunk to balance costs and hybrid work demands.
The University of Michigan's July survey shows consumer confidence rose to a five-month high, with one-year inflation expectations dropping from 5% to 4.4%, but household financial expectations remain weak. There is division within the Federal Reserve over whether to cut rates this month, with the persistent impact of tariffs on inflation being a key variable.