Interest Rate Fight? Economy Looking Strong Regardless

Notwithstanding ongoing disagreements over inflation and the health of the economy, the health of the economy is looking promising.

The White House Council of Economic Advisors reports that consumer spending was strong in the first half of the year.

That’s despite very public controversy over how new tariffs would affect the economy.

“Everybody was waiting for the end of the world,” said financial planner Richard Rosso, “and it didn’t happen.”

The report also found stable job growth and industrial output picking up.

The University of Michigan’s Consumer Sentiment Survey also documents an improving outlook among consumers, after hitting the lowest level in years back in April.

“What’s really important is what’s called the ‘animal spirits,” Rosso explained. “It’s how people feel about things. Retail sales are up. The consumer has been astoundingly resilient. Small businesses are feeling better. More deals are getting done. More certainty.”

Such certainty, Rosso says, is crucial. And after months of argument and an apparently unpredictable future, he says the passage of President Trump’s Big Beautiful Bill budget package, with its continued tax cuts and regulatory reforms, gives businesses and individuals alike some desperately needed predictability.

“That’s certainty,” he said, now that the bill has passed. “Now planning can happen. More deals getting done. Not only does the market like certainty, people like certainty. Small business owners are feeling better about things. Services are strong. Consumers are strong. Markets are strong. The economy is starting to pick up.”

The numbers come during President Trump’s ongoing dispute with Federal Reserve Chairman Jerome Powell over whether the Federal Reserve should cut interest rates to boost the economy.

Rosso acknowledges the economy does not look so weak that it’s in desperate need of rate cuts but says “If you look at the engine of the economy, it’s still not at ‘peak.’ And, sometimes, if you lower rates, you give that battery that’s drained, even though it’s still working, you give it a boost. You give it a charge. We could use the charge right now.”