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Yahoo
22-07-2025
- Business
- Yahoo
Dollar Weakens and Gold Rallies as T-note Yields Slide
The dollar index (DXY00) today is down by -0.12%. The dollar is under pressure today from lower T-note yields. Losses in the dollar accelerated after the US July Richmond Fed manufacturing survey current conditions index unexpectedly fell to an 11-month low. Losses in the dollar are limited by comments from Treasury Secretary Bessent, who said 'he sees no reason for Fed Chair Powell to step down right now.' The dollar has been under pressure due to concerns President Trump would try to fire Powell, which could prompt foreign investors to shun dollar assets over questions of the Fed's independence. More News from Barchart Dollar Falls as Stocks Rally and T-note Yields Decline Dollar Slips Due to Strength in Stocks and Lower T-note Yields Stop Missing Market Moves: Get the FREE Barchart Brief – your midday dose of stock movers, trending sectors, and actionable trade ideas, delivered right to your inbox. Sign Up Now! The US July Richmond Fed manufacturing survey current conditions index unexpectedly fell -12 to an 11-month low of -20, weaker than expectations of an increase to -2. Federal funds futures prices are discounting the chances for a -25 bp rate cut at 5% at the July 29-30 FOMC meeting and 58% at the following meeting on September 16-17. EUR/USD (^EURUSD) today is up by +0.05%. The euro is slightly higher today due to weakness in the dollar. The euro also has support on expectations that the ECB will keep interest rates unchanged at Thursday's policy meeting. Gains in the euro are limited after today's quarterly Bank Lending Survey from the ECB said that loan demand remained weak, a dovish factor for ECB policy and negative for the euro. The euro is also under pressure on concerns that President Trump is pushing for a minimum tariff of 15%-20% in any trade deal with the European Union (EU), as Mr. Trump has remained unmoved by the latest EU offer to reduce car tariffs. Higher tariff rates on EU goods could undercut the Eurozone economy, a bearish factor for the euro. The ECB's quarterly Bank Lending Survey stated that 'Loan demand was supported by declining interest rates, but dampened by global uncertainty and trade tensions, and while lenders saw a slight net increase in loan demand in Q2, the uptake remained weak overall.' Swaps are pricing in a 2% chance of a -25 bp rate cut by the ECB at Thursday's policy meeting. USD/JPY (^USDJPY) today is down by -0.51%. The yen recovered from overnight losses and climbed to a 1-week high against the dollar today after T-note yields fell when Treasury Secretary Bessent said 'he sees no reason for Fed Chair Powell to step down right now.' The yen initially moved lower today after Bloomberg reported that BOJ policymakers will likely keep the policy rate at 0.5% at next week's BOJ meeting. The upside in the yen in the near term may be limited due to concerns that the LDP's loss of its majority in Japan's upper house in Sunday's elections may lead to fiscal deterioration in Japan's government finances, as the government boosts spending and implements tax cuts. A report from Bloomberg said that Bank of Japan (BOJ) officials see little need to shift their policy stance of gradually raising interest rates after Prime Minister Ishiba's election setback and that policymakers will likely keep the policy rate at 0.5% at next week's BOJ meeting. Policymakers also want to see how any trade deal between Japan and the US affects the inflation trend and the economy going forward before raising rates again. August gold (GCQ25) today is up +27.60 (+0.81%), and September silver (SIU25) is down -0.019 (-0.05%). Precious metals are mixed today, with gold climbing to a 5-week high. Today's dollar weakness and lower T-note yields are bullish for precious metals. Also, precious metals garnered support from today's ECB quarterly Bank Lending Survey, which said loan demand remained weak in Q2, a dovish factor for ECB policy. Finally, precious metals have safe-haven support from global trade tensions, following President Trump's announcement last Wednesday that he intends to send a tariff letter to more than 150 countries, notifying them that their tariff rates could be 10% or 15%, effective August 1. Fund buying of gold continues to support prices after gold holdings in ETFs rose to a nearly 2-year high Monday. Silver prices fell from a 1-week high today and turned slightly lower after the US July Richmond Fed manufacturing index unexpectedly fell to an 11-month low, a negative factor for industrial metals demand. On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
Wall Street Journal
05-07-2025
- Business
- Wall Street Journal
To Understand the Economy, This Fed President Is Ditching His Desk
DURHAM, N.C.—Sitting around a table with 15 local business leaders, Tom Barkin peppered them with questions like an economic detective. Are you planning to expand or shrink your workforces? Are you making new investments or pulling back? When the conversation turned to inflation, the Richmond Fed president extracted an uncomfortably honest answer about how President Trump's tariffs have some firms thinking about their power to raise prices.
Yahoo
28-06-2025
- Business
- Yahoo
Dollar Falls to 3-1/4 Year Low as President Trump Looks to Fast-Track His Pick for New Fed Chair
The dollar index (DXY00) on Thursday fell by -0.54%, reaching a 3-1/4 year low. The dollar retreated following a Wall Street Journal report that said President Trump is considering accelerating the announcement of the next Fed Chair. The dollar remained lower on Thursday's US economic news of a downward revision in Q1 GDP and a wider-than-expected May trade deficit report, which was a negative factor for Q2 GDP. The dollar received underlying support from stronger-than-expected initial unemployment claims, core capital goods orders, and pending home sales reports. Also, hawkish comments from Richmond Fed President Barkin were supportive of the dollar when he said he favors waiting for more clarity before adjusting interest rates. Dollar Falls to 3-1/4 Year Low as President Trump Looks to Fast-Track His Pick for New Fed Chair Dollar Falls as President Trump Looks to Fast-Track His Pick for New Fed Chair Stop Missing Market Moves: Get the FREE Barchart Brief – your midday dose of stock movers, trending sectors, and actionable trade ideas, delivered right to your inbox. Sign Up Now! US weekly initial unemployment claims fell -7,000 to 236,000, showing a stronger labor market than expectations of 243,000. However, weekly continuing claims rose +37,000 to a 3-1/2 year high of 1.974 million, above expectations of 1.950 million, signaling more people are staying out of work for longer. US Q1 GDP was revised lower to -0.5% (q/q annualized), weaker than expectations of no change at -0.2% as Q1 personal consumption was revised downward to +0.5% from +1.2%. The Q1 core PCE price index was revised higher to +3.5% (q/q annualized), stronger than expectations of unchanged at +3.4%. US May capital goods new orders nondefense ex-aircraft and parts rose +1.7% m/m, stronger than expectations of +0.1% m/m and the largest increase in 4 months. The US May trade deficit of -$96.6 billion was wider than expectations of -$86.1 billion, a negative factor for Q2 GDP. US May pending home sales rose +1.8% m/m, stronger than expectations of +0.1% m/m. Richmond Fed President Barkin said he expects tariffs will put upward pressure on prices, and with so much still uncertain, he favors waiting for more clarity before adjusting interest rates. The dollar retreated Thursday after the Wall Street Journal reported that President Trump may announce Fed Chair Powell's replacement as soon as September, an unusually early appointment. That reinforced expectations of a more dovish-leaning Fed, after Trump criticized Powell for holding interest rates steady. Because Powell's term expires in May 2026, announcing a new Fed chair far earlier than the traditional three-to-four-month transition period could allow the chair-in-waiting to influence expectations about the likely path for interest rates. An overly dovish Fed would likely produce higher inflation, which depreciates the value of the dollar. The markets are discounting a 25% chance of a -25 bp rate cut at the July 29-30 FOMC meeting. EUR/USD (^EURUSD) rose +0.43% and posted a 3-3/4 year high. The euro moved higher after the dollar fell on the report that President Trump may name Fed Chair Powell's successor as soon as September. The euro was undercut after the German Jun GfK consumer confidence index unexpectedly declined. The German Jun GfK consumer confidence index unexpectedly fell -0.3 to -20.3, weaker than expectations of an increase to -19.2. Swaps are pricing in a 9% chance of a -25 bp rate cut by the ECB at the July 24 policy meeting. USD/JPY (^USDJPY) fell by -0.63%. The yen climbed to a 1-1/2 week high against the dollar as the dollar tumbled on the Wall Street Journal report that President Trump would name a successor to Fed Chair Powell sooner than expected. Thursday's slide in the 10-year T-note yield to a 7-week low was also bearish for the dollar and bullish for the yen. August gold (GCQ25) on Thursday rose by +4.90 (+0.15%), and July silver (SIN25) rose by +0.481 (+1.33%). Precious metals closed higher on Thursday on the report that President Trump might announce his new Fed pick early, which could result in inflation and increased demand for precious metals as a store of value. The slump in the dollar index to a new 3-1/4 year low was also a bullish factor for precious metals. Silver prices had carryover support from Thursday's rally in copper prices to a 2-3/4 month high. Precious metals prices were undercut by reduced safe-haven demand with the rally in stocks. Also, hawkish comments from Richmond Fed President Barkin weighed on gold prices when he said he favors waiting for more clarity before adjusting interest rates. In addition, reduced geopolitical risks in the Middle East curbed safe-haven demand for precious metals as the ceasefire between Israel and Iran continues to hold. Thursday's downward revision to US Q1 GDP was negative for industrial metals demand and was bearish for silver prices. On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
Yahoo
23-06-2025
- Business
- Yahoo
Bond Traders Look to Fed Officials for Clues on Rate Cut Timing
(Bloomberg) -- Bond investors are on alert for hints on when the Federal Reserve will deliver the two 2025 interest-rate cuts officials projected at their latest policy meeting. Bezos Wedding Draws Protests, Soul-Searching Over Tourism in Venice One Architect's Quest to Save Mumbai's Heritage From Disappearing NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports They'll also closely watch geopolitical developments after the US attacked nuclear sites in Iran over the weekend. Traders have been pricing in a solid chance that officials deliver a quarter-point reduction at their September meeting. Speeches by Fed officials and a reading of the central bank's preferred gauge of inflation may help them hone the timing further. Chair Jerome Powell will testify before lawmakers Tuesday and Wednesday as part of the central bank's semi-annual monetary policy report. The Treasury will sell $69 billion two-year, $70 billion five-year and $44 billion seven-year notes in the latest test of investor demand for US debt. What to Watch Economic data: June 23: S&P Global US manufacturing, services, composite PMIs; existing home sales June 24: Philadelphia Fed non-manufacturing activity' current account balance; FHFA house price index; S&P CoreLogic CS HPI; Richmond Fed manufacturing index and business conditions; Conference board consumer confidence June 25: MBA mortgage applications; new home sales; building permits June 26: Advance goods trade balance, imports and exports; initial jobless claims; wholesale and retail inventories; GDP Annualized QoQ (1Q); GDP price index (1Q); personal consumption (1Q); core PCE price index (1Q); Chicago Fed national activity index; durable and capital goods orders; pending home sales; Kansas City Fed manufacturing activity June 27: Personal income and spending; PCE price index and core PCE; Bloomberg June US economic survey; U. of Michigan sentiment and inflation expectations; Kansas City Fed services activity Fed calendar: June 23: Fed governor Christopher Waller; Vice chair for supervision Michelle Bowman; Chicago Fed President Austan Goolsbee; New York Fed President John Williams and Fed Governor Adriana Kugler June 24: Cleveland Fed President Beth Hammack; Fed Chair Jerome Powell testifies before the House committee on financial services; Williams; Boston Fed President Susan Collins; Fed Governor Michael Barr June 25: Powell testifies before Senate committee on banking, housing, and urban affairs June 26: Richmond Fed President Tom Barkin; Hammack; Barr June 27: Williams, Fed Governor Lisa Cook; Hammack Auction calendar: June 23: 13-, 26-week bills June 24: 6-week bills, two-year notes June 25: 17-week bills; two-year floating rate notes; five-year notes June 26: 4-, 8-week bills; seven-year notes Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros The US Has More Copper Than China But No Way to Refine All of It Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? ©2025 Bloomberg L.P.
Malay Mail
21-06-2025
- Business
- Malay Mail
Tariffs, inflation and a shaky job market: US Federal Reserve split on when to cut rates
WASHINGTON, June 21 — The close split at the US Federal Reserve over whether to keep hedging against inflation risks or move forward faster with rate cuts came through yesterday in the first public comments from policymakers following a decision this week to hold borrowing costs steady for now. Rising tariffs are expected to raise inflation over the rest of the year, with a new Federal Reserve monetary policy report yesterday concluding that higher import taxes had already raised inflation for goods even if headline inflation, including services, remains weaker than expected in recent months. But Fed Governor Christopher Waller yesterday said he felt the inflation risk from tariffs was small, and the Fed should cut rates as soon as its next meeting in July, because recent price increases have been moderate while he sees some worrying signs for the job market such as a high unemployment rate among recent college graduates. 'Any tariff inflation ... I don't think is going to be that big and we should just look through it in terms of setting policy,' Waller said on CNBC's Squawk Box. 'The data the last few months has been showing that trend inflation is looking pretty good ... We could do this as early as July.' 'I'm all in favour of saying maybe we should start thinking about cutting the policy rate at the next meeting, because we don't want to wait till the job market tanks before we start cutting the policy rate,' Waller said. In a Reuters interview, Richmond Fed President Tom Barkin took a more tempered view, arguing that with inflation still above the Fed's 2 per cent target after a multi-year battle to contain it, key tariff debates still unresolved, and the unemployment rate at a low 4.2 per cent, there was no urgency to cut rates. 'Nothing is burning on either side such that it suggests there's a rush to act,' Barkin said. 'I'm not in a mood to ignore a spike in inflation were it to come ... We'll have to see if it comes. 'I'm comfortable with where we are ... Core inflation is still over target. Being modestly restrictive is a good way to address that.' San Francisco Fed President Mary Daly had what may be an in-between view, telling CNBC late yesterday a rate cut in the autumn would be 'more appropriate' than a July move unless the labour market falters. While tariffs could give rise to meaningful inflation, she said, there is 'a lot to be said' for the view that businesses will find ways not to pass higher costs on to their customers, tempering any inflation impact. The Fed should not be preemptive and needs to watch where the data goes, she said, but with data in hand showing both inflation and the job market cooling, 'we cannot wait so long that we forget that the fundamentals of the economy are moving in a direction where an interest rate adjustment might be necessary.' The job market is still solid, she said, but 'we're at a point where additional softening could turn into weakening, which I don't want to see, and we can't allow for that to happen because we're waiting for inflation to pop up just around the corner.' The Fed this week held its policy rate steady in the 4.25 to 4.5 per cent range where it has been since December. The Trump administration says the tariffs will ultimately help the US economy, and the president has demanded the Fed slash rates immediately. New Fed economic projections this week, by contrast, anticipate slower growth and higher inflation. Those projections showed policymakers overall still anticipate rate cuts later in the year, a sign they do feel tariffs will raise prices but not in a persistent way. Opinion, however, was closely divided in what Barkin called a 'bimodal' split, with seven policymakers seeing zero cuts needed this year, and eight anchoring the median at two cuts, which aligns with investors' view of quarter-point reductions at the Fed's September and December meetings. Though none of the three identified their specific rate views, their comments sketched their ongoing debate over how seriously and persistently President Donald Trump's efforts to recast global trade will influence the path of prices, jobs and growth in coming months. In a Wednesday press conference, Fed Chair Jerome Powell cautioned against putting too much weight on any particular outlook at this point, given how volatile the debate around trade has been and how many key decisions remain outstanding. Powell testifies in Congress on Tuesday and Wednesday of next week as part of regular semiannual hearings on monetary policy, which in this case follows a week of insults from Trump and demands to cut rates, and nervous chatter on Wall Street about the president's plans for the Fed when Powell departs next May. Powell on Wednesday seemed content to wait for more data before resuming rate cuts. 'For the time being we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance,' Powell told reporters. — Reuters
