Trump Renews Push for Fed Rate Cut

Trump Renews Push for Fed Rate Cut

The market took this to mean that a bigger interest rate cut was on the way.

The US central bank raised the benchmark borrowing rate four times previous year but seems nearly certain to pull back with the first cut in a decade at its policy meeting July 30-31.

Sterling rose on Thursday touching highs of 1.2495 after United Kingdom lawmakers approved an amendment that would make it harder for the next Prime Minister to suspend parliament in order to force through Brexit on the 31st of October.

The dollar stood at 107.42 yen, up 0.2% from late US levels after having hit a three-week low of 107.21 the previous day. "One suspects that consumers and businesses will not like a non-uniform currency in which many types of currency trade simultaneously at a variety of prices in a local market".

The markets had priced in a rate cut of 0.25 percent after Fed Chairman Jerome Powell indicated in testimony to Congress earlier this month that the central bank was moving to a more "accommodative" policy in light of concerns over global growth, the impact of the USA trade war against China, low U.S. inflation and a fall in business investment. Traders were looking for a decline of 0.1%.

MSCI's All-Country World Index, which tracks shares in 47 countries, was up 0.3% after earlier peaking at 0.5% up.

Trump said Friday he liked Williams "first statement much better than his second".

USA stocks jumped on Thursday after Federal Reserve Bank of New York President John Williams said central banks must take swift action when faced with adverse economic conditions, which some investors interpreted as signaling a 0.5% rate cut in July.

The bond markets' sudden warning to the Fed though - that interest rates are too high - doesn't necessarily mean that policymakers acted too quickly in raising rates at the end of 2018. Strong resistance can be seen at 108.07 (9 DMA), an upside break can trigger rise towards 108.54 (50 DMA).On the downside, immediate support is seen at 106.81 (Lower Bollinger Band), a break below could take the pair towards 106.00 (Psychological level).

TOKYO, July 19 ― The dollar was on the defensive today after Federal Reserve officials bolstered expectations of an aggressive rate cut this month to address weakening price pressures. Britain's FTSE 100 index gained 0.6% and Germany's DAX rose 0.75%.

The Dow closed down 0.3%, or 69 points, while the S&P 500 and the Nasdaq Composite finished 0.6% and 0.7% lower, respectively.

The greenback fell broadly yesterday after Williams' remarks bolstered bets that the Fed would cut interest rates by 50 basis points, rather than 25 basis points. The Stoxx Europe 600 advanced, led by food and beverage companies, while benchmarks in Japan, China and Hong Kong also climbed.

US Treasury yields were lower across the board.

Spot gold was down 1.5% at $1,424.13 per ounce at 1:52 p.m. EDT (1752 GMT), having touched its highest since early May 2013 at $1,452.60.USA gold futures settled down 0.1% at $1,426.70 per ounce.

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