The latest existing home sales data has added new layers of concern to an already fragile U.S. economy, revealing a decline to an annualized rate of 3.93 million in June, falling short of the 4.01 million forecast. The 2.7% monthly drop underlines the ongoing strain of high mortgage rates and housing affordability, a theme that continues to weigh on consumer sentiment and broader economic growth. This softness in housing data comes amid growing geopolitical and economic turbulence, primarily driven by trade uncertainty and political pressure on the Federal Reserve. The U.S. administration’s aggressive stance on trade has now pivoted toward the European Union, with unresolved negotiations threatening a 30% tariff on EU imports starting August 1. In response, the EU has prepared a range of retaliatory measures targeting American digital and aerospace exports. These tensions follow the recently concluded U.S.-Japan trade agreement, which imposes a 15% tariff on Japanese exports, including automobiles. That deal triggered optimism in global equity markets, particularly lifting automotive stocks in both Asia and Europe, on hopes that similar arrangements could be reached with the EU. However, the looming deadline and lack of resolution continue to cloud the market’s outlook. The political backdrop is just as complex. U.S. President Donald Trump has increased his vocal criticism of Fed Chair Jerome Powell, stating in a meeting with Philippine President Ferdinand Marcos that Powell has “done a bad job” and could be “out pretty soon.” Treasury Secretary Scott Bessent echoed that sentiment, suggesting that the entire institution might need reevaluation due to “mission creep” and mounting concerns over financial inefficiencies, including building renovations and the Fed’s controversial practice of paying interest on reserves. These statements come at a time when the Federal Reserve is in a pre-decision blackout period ahead of its July 30 policy meeting, adding uncertainty to market expectations. The ongoing debate over the Fed’s independence, particularly in light of Trump’s aggressive rhetoric, has strengthened the appeal of gold as a safe-haven asset. Meanwhile, oil markets showed modest gains amid a positive outlook on trade progress and a sharper-than-expected draw in U.S. crude inventories. Brent crude edged up to $68.72 a barrel and West Texas Intermediate to $65.47, supported by a 3.2 million barrel drop in U.S. crude stocks, surpassing the anticipated 1.6 million barrel decline. Markets are watching closely as momentum builds for a U.S.-EU trade agreement, with reports suggesting a potential deal involving a 15% baseline tariff and targeted exemptions. As both trade and monetary policy developments unfold, the intersection of geopolitical risks, central bank credibility, and domestic economic weakness continues to define the current global financial landscape. Learn the art of smart trading with expert-designed courses from MJFXM, your trusted trading partner.