URGENT UPDATE: Markets are in turmoil as Trump’s dramatic threats against Federal Reserve Chair Jerome Powell sent the dollar plunging and stocks on a rollercoaster yesterday. The immediate fallout saw the dollar drop sharply while stocks fell, only to stabilize as the threat of Trump’s firing receded.
This latest drama comes just weeks before the Federal Open Market Committee (FOMC) meeting at the end of July, leaving traders anxious about the potential impact on interest rates. Currently, there is a staggering 98% probability that no rate change will occur this month. However, traders are bracing for a heated debate in September, with expectations showing a 62% chance of a rate cut.
Investors are now looking closely at upcoming inflation reports, particularly the significant CPI reports set for August 12 and September 11. The first report will be crucial for shaping market expectations, while the latter will coincide with the Fed’s blackout period, complicating communications ahead of the September 17 decision.
As Trump continues to apply pressure on the Fed, evidence suggests that tariffs are beginning to influence inflation. The upcoming reports will be vital in determining how the Fed will respond in the months ahead. Officials are aware that any shifts in policy will have immediate consequences, and the clock is ticking.
Trade developments also loom large as the August 1 deadline approaches, adding another layer of uncertainty to the financial landscape. Analysts warn that the combination of trade tensions and inflationary pressures will keep markets on edge.
In the midst of this turmoil, ForexLive.com is evolving into investingLive.com, aiming to provide smarter market updates and assist investors in navigating these challenging conditions.
As summer unfolds, one thing is clear: with Trump at the helm, there’s never a dull moment in the world of finance.