The economic winds are changing. Headwinds from the trade war are fading, while the 'One Big Beautiful Bill' will add 0.9 percentage points to GDP—a meaningful tailwind. Combined with lower oil prices, a weaker dollar, and easy financial conditions, these accumulating tailwinds make it more difficult for the Fed to cut rates this year.

The labor market weakness seen in the establishment survey may not indicate weaker demand, but could be due to a dramatic slowdown in immigration (from ~3M to ~500K/year). This creates a huge discrepancy between weak labor data and strong GDP accounts.

Acknowledges a significant share of 2025 growth came from AI/data center build-out. If the AI story rolls over (e.g., Magnificent Seven weaker earnings, convergence to one large language model), underlying weakness in manufacturing would be revealed.