US Dollar Holds Its Ground: A Quiet Pause Before the Fed’s Big Speech
On Thursday, the U.S. dollar didn’t move much – a clear sign that traders were holding their breath while the Federal Reserve gears up for its Jackson Hole symposium. The market is breathing easy, but with fingers crossed on policy and political knots, caution rolls in heavily.
Why Everyone’s Waiting for Powell’s Friday Talk
- What’s at stake? Jerome Powell is slated to speak Sunday. His words will decide whether the U.S. snacks on a small rate cut next September.
- Market odds: Traders estimate an 81‑percent probability that the Fed will shave 0.25 points from rates on the 9‑month horizon.
- Next move: A second cut is eyed for December, but the path is still unclear thanks to conflicting outlooks on inflation, labor softness, and tariff headaches.
So far, the committee’s minutes show that inflation remains the main villain, but weaker employment figures and rising tariff tensions are causing some senators to debate internally. The great question is whether Powell will go “mindful and measured” or dare to confirm the market’s calm expectations.
Jobless Claims as a Potential Game‑Changer
On the same day, the release of jobless claims will add fuel to the forecast engine. If the numbers show a cooling job market, hawks may feel encouraged to cut rates, tightening the dollar’s grip. Conversely, a robust job scene could throw a wrench in those expectations.
Yield Curve & Political Drama
Short‑term Treasury yields nudged higher across the board, while the 10‑year slope rested snugly near 4.3%. Despite a duo of decline‑days, the rates stay near the levels of the recent run‑in.
Yet investors hesitate to commit until Powell’s speech lands. The anticipation is that dovish signals could push both the dollar and yields down, while a more cautious stance might lead to an uptick.
Adding to the uncertainty: President Donald Trump has called for Governor Lisa Cook’s resignation—a move that stirs fresh anxiety over the Fed’s independence. Political twists keep the market on edge.
Stay tuned: the next headlines will tell us whether Powell pulls a rapid‑fire rate cut or a “think‑again” pause.
