US Dollar Holds the Line, Keeper of the Fed’s Whisper
For the second straight day, the U.S. dollar stayed pretty much where it was after Federal Reserve Chair Jerome Powell slipped out a few words that had traders twisting their thumbs around the clock.
Why Traders Were On Edge
- Fed’s next move is still a mystery—no clear roadmap was handed out.
- Powell’s cautious nod toward easing inflation gave a mental tickle that maybe the Fed will back off a bit soon.
- Everyone’s eyeing a possible September rate cut and the idea that we might see three cuts by the end of 2024.
Impact on Treasury Yields
The march toward softer policy is pulling Treasury yields down. 10‑year yields are hovering under this year’s high, and if the June retail sales numbers look weak, they could slide even further.
What’s Coming Up?
The dollar and bond markets will largely hang on the next batch of U.S. data. Retail sales for June—handed out by the end of today—are expected to stay flat, just like April’s modest 0.1% bump, which hints at a chill in consumer confidence.
- Should consumer spending remain sluggish, the dollar could take a dip.
- Bond yields might also continue to slide, riding the wave of a potentially softer Fed stance.
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