Dollar’s Tiny Bounce Hits the Radar
Before the week’s big data drops, the dollar nudged up a smidge, only to settle around its recent slump‑line. Investors are keeping a wary eye on its lower end, uneasy about the Fed’s future moves and the sense that the central bank might be loosening its reins.
Trump’s Ferris–Wheel of Fed Politics
Donald Trump’s attempt to oust Fed Governor Lisa Cook over alleged fraud has stoked fresh fears about that institutional tug‑of‑war. The market reads this as a larger bid by Trump to bend the monetary policy band to his own tunes—any move that might dent faith in the dollar.
Cook’s Exit: A Dovish Doorway?
Doing a coup on Cook could open the floodgate for softer nominations, speeding up the chase for lower rates. Even now, futures swell the odds of a September rate cut—plus a possible push further by year‑end.
Treasury Yields: A Tilted Story
- Yields are a patchy picture; they could stay slack as we wait for the next rate dip.
- New data might twist expectations, pulling down yields if folks see rates heading lower.
- But the bumpy ride of central‑bank independence worries still cap how far rates can fall.
Coming‑Up: Data Fingers All Tipped!
Tomorrow’s gig: GDP and labour stats. Friday’s finale: the PCE price index—Fed’s favourite measure of inflation. These numbers will decide if the wallet‑friendly policy swings are justified. Soft numbers? Yep: they’ll add fuel to the dovish fire, tightening the dollar and yields even more.
