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The Fed's coaching change has reopened, and Powell will make his debut under heavy pressure
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Official Website]: The Fed's change of coach has reopened, and Powell will make his debut under heavy pressure." Hope it will be helpful to you! The original content is as follows:
As the Federal Reserve is about to enter a silent period, current director Waller, as the next popular candidate for the Federal Reserve Chairman, reiterated his support for a 25 basis point interest rate cut in July, and data shows that consumer expectations for inflation have improved. Meanwhile, trade tensions between the United States and the EU continue, Trump pushes to impose a minimum tariff of 15%-20% on all EU goods and plans to announce tariff plans for specific industries by August 1.
In the eouu.cning week, the European and American manufacturing and service industry PMI will provide any signs about the impact of Trump's tariff policy. On the central bank, the Federal Reserve entered a silent period before the July interest rate meeting, but Federal Reserve Chairman Powell, who has been deeply involved in a public opinion storm, will show up, and market participants will hold their breath to pay attention to whether he will respond to Trump's recent attacks. The ECB will announce its latest interest rate resolution.
Forex Market:The US dollar index rose at the beginning of the week and entered a huge shock. It closed at 98.45 this week, up 0.63%, the second consecutive week of closing positive lines. On Tuesday, the US dollar rose significantly as US CPI inflation rebounded slightly in June, and the market expected the Fed's interest rate cut to lower, and the US dollar rose significantly. On Wednesday, Trump's repeated statements about firing Powell led to a rebound in the dollar's plunge. At the same time, U.S. Treasury yields rose, with the 30-year U.S. Treasury yields once exceeded 5%, further supporting the strengthening of the US dollar. In terms of non-US currencies, the rise in the US dollar drags down the trend of currencies such as the pound, euro, Australian dollar and Japanese yen. The pound fell to a new low since May 20, closing down for the third consecutive week; the dollar rose above 148 against the yen, the first time since May 13, and closed up for the third consecutive week. The strong euro has been shut down for the second consecutive week, and the market expects the European Central Bank to keep interest rates unchanged in July.
Gold Market:Spot gold fluctuated violently this week, showing a volatile trend overall, closing at $3,350.39 per ounce, a slight decline of 0.14%, mainly affected by factors such as U.S. economic data, rising U.S. Treasury yields, worrying prospects for the Fed's independence, and tariff policies. Among them, gold took a roller coaster on Wednesday, once rising above the $3,370 mark, but narrowed the gains after Trump denied that he had drafted a dismissal letter. Spot silver fell after a sharp rise at the beginning of the week, closing at $38.19/ounce, and once reached a new high since September 2011, expanding its gain this year to 35%.
Crude oil market: International oil prices fell overall this week, and the rekindling of the trade war has caused the outlook for demand in the oil market. Trump's threat of sanctions on Russia is accompanied by a 50-day buffer period, which is less than the previous oil market's concerns about immediate supply interruption. Both oils closed for the first time in three weeks.
A Review of Weekly News 1. The market is still betting on a rate cut in September. Fed Waller once again called for July action. Data released on Tuesday showed that the overall CPI annual rate in June rose to 2.7%, the highest since February; the monthly rate was 0.3%, the highest since January, in line with market expectations; the core CPI annual rate rose to 2.9%, the highest since February; the monthly rate was 0.2%, which was less than the market expectations. After the data was released, interest rate futures still show that the possibility of the Federal Reserve cutting interest rates this month is extremely small, but the possibility of a 25 basis point cut in September is very high. The Federal Reserve's Mickey Board issued a statement saying that the CPI report will not change the Fed's policy direction. Trump eouu.cnmented on the data that consumer prices are sluggish and the federal funds rate should be lowered immediately; the Federal Reserve should lower interest rates by 3 percentage points. Fed Collins said core inflation is expected to remain at about 3% by the end of the year, and the Fed should maintain positive patience. In addition, the Federal Reserve Beige Book shows that US economic activity rose slightly from June to early July, but the outlook is still pessimistic. Prices have been reported in 12 regions across the United States, eouu.cnpanies are facing cost pressures related to tariffs, and some eouu.cnpanies' businesses are slowing down. Federal Governor Waller once again stated that interest rates should be cut by 25 basis points in July, as U.S. economic growth slows down, employment risks intensify, and tariffs have limited impact on inflation. He stressed that interest rate cuts are only the first step for monetary policy to move to neutrality, and the subsequent decision will depend on the data. He also said he would agree if Trump nominated himself as Fed chairman. 2. Trump "scareed" to Wall Street! Powell's "subsidy" alarm sounded On Wednesday, the financial market experienced a violent shock. White House officials revealed that Trump is considering replacing Federal Reserve Chairman Powell and testing the tone of members of Congress. The news caused US stocks, the US dollar and long-term US bonds to fall, while gold and short-term Treasury bonds rose as expectations of interest rate cuts heated. However, the storm reversed within an hour. Trump will be on the Oval soonThe circular office made it clear to reporters that "there is no replacement plan at present." But he still stressed that "no possibility is ruled out" and also hinted that Powell could be removed for "legitimate reasons" on the grounds that the Fed's headquarters renovation project was significantly overspent. Powell has taken the initiative to ask the US central bank inspector general to review the cost of renovation projects. In response to the White House budget director, he said that the Fed eouu.cnmittee believes transparency is crucial; reviews have continued since 2017, and the project inspector general is also reviewing building renovation projects; the project is huge, involving major structural renovations, security systems and other system upgrades, and removal of asbestos and lead pollution. The Federal Housing and Finance Director said that according to very reliable congressional sources, one or more members of Congress may accuse Powell of alleged perjury of the renovation of the $2.5 billion Fed building. 3. Trump will impose tariffs of slightly higher than 10% on small countries, and the EU is preparing to counter the US service industry. U.S. President Trump announced on Tuesday local time that the United States may impose tariffs on imported drugs and semiconductors by August 1. The initial tax rate of drug tariffs is low, and pharmaceutical eouu.cnpanies will return to production for about a year, and then the tariffs may soar to 200%. Semiconductor tariffs will also be promoted simultaneously, with the timetable similar to drug tariffs. In addition, the United States has issued unilateral tariff notice letters to several trading partners, but stated that negotiations will continue. On Tuesday, the White House announced an agreement with Indonesia to reduce the 32% tariff in the notice letter to 19%. In exchange, Indonesia promised to purchase a large number of U.S. energy products, agricultural products and Boeing passenger aircraft, and U.S. products enjoy zero tariff treatment in Indonesia. Trump predicts that "two to three" trade agreements may be reached before the reciprocal tariffs take effect on August 1, of which the agreement with India is the most likely. For small economies that have not obtained customized tax rates, Trump said it is possible to impose a uniform standard tariff of "slightly above 10%" and is expected to cover more than 150 secondary trading partners. 4. Did Trump encourage Ukraine to crack down on Russia’s depth? Putin ignores Trump's second-level tariff threat According to the Financial Times on the 15th, US President Trump privately encouraged Ukrainian President Zelensky to strengthen his in-depth attack on Russia during a call with Ukrainian President Zelensky on July 4. The White House responded that Trump was just asking questions and did not encourage Ukraine to take action. It is reported that Trump asked Zelensky during the call whether Ukraine could strike Moscow and St. Petersburg if the United States provides long-range weapons. Zelensky responded that as long as the United States provides the corresponding weapons, Ukraine can do it. Trump supported the idea, saying it was intended to "make the Russians miserable" and forced the Kremlin to return to the negotiating table. The above content is all about "[XM Foreign Exchange Official Website]: The Fed's coaching change storm has reopened, and Powell will appear under heavy pressure" is carefully eouu.cnpiled and edited by the editor of XM Foreign Exchange.I hope it will be helpful to your transaction! Thanks for the support! Life in the present, don’t waste your current life in missing the past or looking forward to the future.
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