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Yahoo
10 hours ago
- Business
- Yahoo
Dollar Falls to 3-1/4 Year Low as President Trump Looks to Fast-Track His Pick for New Fed Chair
The dollar index (DXY00) on Thursday fell by -0.54%, reaching a 3-1/4 year low. The dollar retreated following a Wall Street Journal report that said President Trump is considering accelerating the announcement of the next Fed Chair. The dollar remained lower on Thursday's US economic news of a downward revision in Q1 GDP and a wider-than-expected May trade deficit report, which was a negative factor for Q2 GDP. The dollar received underlying support from stronger-than-expected initial unemployment claims, core capital goods orders, and pending home sales reports. Also, hawkish comments from Richmond Fed President Barkin were supportive of the dollar when he said he favors waiting for more clarity before adjusting interest rates. Dollar Falls to 3-1/4 Year Low as President Trump Looks to Fast-Track His Pick for New Fed Chair Dollar Falls as President Trump Looks to Fast-Track His Pick for New Fed Chair Stop Missing Market Moves: Get the FREE Barchart Brief – your midday dose of stock movers, trending sectors, and actionable trade ideas, delivered right to your inbox. Sign Up Now! US weekly initial unemployment claims fell -7,000 to 236,000, showing a stronger labor market than expectations of 243,000. However, weekly continuing claims rose +37,000 to a 3-1/2 year high of 1.974 million, above expectations of 1.950 million, signaling more people are staying out of work for longer. US Q1 GDP was revised lower to -0.5% (q/q annualized), weaker than expectations of no change at -0.2% as Q1 personal consumption was revised downward to +0.5% from +1.2%. The Q1 core PCE price index was revised higher to +3.5% (q/q annualized), stronger than expectations of unchanged at +3.4%. US May capital goods new orders nondefense ex-aircraft and parts rose +1.7% m/m, stronger than expectations of +0.1% m/m and the largest increase in 4 months. The US May trade deficit of -$96.6 billion was wider than expectations of -$86.1 billion, a negative factor for Q2 GDP. US May pending home sales rose +1.8% m/m, stronger than expectations of +0.1% m/m. Richmond Fed President Barkin said he expects tariffs will put upward pressure on prices, and with so much still uncertain, he favors waiting for more clarity before adjusting interest rates. The dollar retreated Thursday after the Wall Street Journal reported that President Trump may announce Fed Chair Powell's replacement as soon as September, an unusually early appointment. That reinforced expectations of a more dovish-leaning Fed, after Trump criticized Powell for holding interest rates steady. Because Powell's term expires in May 2026, announcing a new Fed chair far earlier than the traditional three-to-four-month transition period could allow the chair-in-waiting to influence expectations about the likely path for interest rates. An overly dovish Fed would likely produce higher inflation, which depreciates the value of the dollar. The markets are discounting a 25% chance of a -25 bp rate cut at the July 29-30 FOMC meeting. EUR/USD (^EURUSD) rose +0.43% and posted a 3-3/4 year high. The euro moved higher after the dollar fell on the report that President Trump may name Fed Chair Powell's successor as soon as September. The euro was undercut after the German Jun GfK consumer confidence index unexpectedly declined. The German Jun GfK consumer confidence index unexpectedly fell -0.3 to -20.3, weaker than expectations of an increase to -19.2. Swaps are pricing in a 9% chance of a -25 bp rate cut by the ECB at the July 24 policy meeting. USD/JPY (^USDJPY) fell by -0.63%. The yen climbed to a 1-1/2 week high against the dollar as the dollar tumbled on the Wall Street Journal report that President Trump would name a successor to Fed Chair Powell sooner than expected. Thursday's slide in the 10-year T-note yield to a 7-week low was also bearish for the dollar and bullish for the yen. August gold (GCQ25) on Thursday rose by +4.90 (+0.15%), and July silver (SIN25) rose by +0.481 (+1.33%). Precious metals closed higher on Thursday on the report that President Trump might announce his new Fed pick early, which could result in inflation and increased demand for precious metals as a store of value. The slump in the dollar index to a new 3-1/4 year low was also a bullish factor for precious metals. Silver prices had carryover support from Thursday's rally in copper prices to a 2-3/4 month high. Precious metals prices were undercut by reduced safe-haven demand with the rally in stocks. Also, hawkish comments from Richmond Fed President Barkin weighed on gold prices when he said he favors waiting for more clarity before adjusting interest rates. In addition, reduced geopolitical risks in the Middle East curbed safe-haven demand for precious metals as the ceasefire between Israel and Iran continues to hold. Thursday's downward revision to US Q1 GDP was negative for industrial metals demand and was bearish for silver prices. On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
Yahoo
15 hours ago
- Business
- Yahoo
Trump says he wants interest rate cut to 1%, would 'love' if Powell resigned
By Trevor Hunnicutt and Kanishka Singh WASHINGTON (Reuters) -U.S. President Donald Trump said on Friday he would "love" if Federal Reserve Chair Jerome Powell were to resign, and the president also said he wanted interest rates cut to 1%. KEY QUOTES "I'd love him to resign if he wanted to, he's done a lousy job," Trump said, also labeling the Fed chair as "stupid." "I think we should be paying 1% right now, and we're paying more because we have a guy who suffers from, I think, Trump Derangement Syndrome," Trump added. WHY IT'S IMPORTANT Trump has long attacked the Federal Reserve chair over interest rates that the U.S. president wants lowered. Fed chairs have long been seen as insulated from presidential dismissal for reasons other than malfeasance or misconduct, but Trump has threatened to test that legal premise with frequent threats to fire Powell. Powell's term ends in May 2026, and Trump is expected to nominate a successor in the coming months. CONTEXT Trump said he will name as successor to Powell someone who will lower rates. Last week, the Fed decided to leave short-term borrowing costs in the 4.25%-4.50% range. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
15 hours ago
- Business
- Reuters
Trump says he wants interest rate cut to 1%, would 'love' if Powell resigned
WASHINGTON, June 27 (Reuters) - U.S. President Donald Trump said on Friday he would "love" if Federal Reserve Chair Jerome Powell were to resign, and the president also said he wanted interest rates cut to 1%. "I'd love him to resign if he wanted to, he's done a lousy job," Trump said, also labeling the Fed chair as "stupid." "I think we should be paying 1% right now, and we're paying more because we have a guy who suffers from, I think, Trump Derangement Syndrome," Trump added. Trump has long attacked the Federal Reserve chair over interest rates that the U.S. president wants lowered. Fed chairs have long been seen as insulated from presidential dismissal for reasons other than malfeasance or misconduct, but Trump has threatened to test that legal premise with frequent threats to fire Powell. Powell's term ends in May 2026, and Trump is expected to nominate a successor in the coming months. Trump said he will name as successor to Powell someone who will lower rates. Last week, the Fed decided to leave short-term borrowing costs in the 4.25%-4.50% range.
Yahoo
2 days ago
- Business
- Yahoo
Dollar Falls as President Trump Looks to Fast-Track His Pick for New Fed Chair
The dollar index (DXY00) today is down by -0.49% at a 3-1/4 year low. The dollar retreated today following a Wall Street Journal report that said President Trump is considering accelerating when he will announce the next Fed Chair. The dollar remained lower after today's US economic news of a downward revision in Q1 GDP and a wider-than-expected May trade deficit report, which was a bearish factor for Q2 GDP. The dollar received underlying support from stronger-than-expected initial unemployment claims, core capital goods orders, and pending home sales reports. Also, hawkish comments from Richmond Fed President Barkin were supportive of the dollar when he said he favors waiting for more clarity before adjusting interest rates. What Will It Take to Push Gold Prices to New Record Highs? Dollar Undercut by Reduced Middle East Tensions Dollar Falls as President Trump Looks to Fast-Track His Pick for New Fed Chair Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. US weekly initial unemployment claims fell -7,000 to 236,000, showing a stringer labor market than expectations of 243,000. However, weekly continuing claims rose +37,000 to a 3-1/2 year high of 1.974 million, above expectations of 1.950 million, signaling more people are staying out of work for longer. US Q1 GDP was revised lower to -0.5% (q/q annualized), weaker than expectations of no change at -0.2% as Q1 personal consumption was revised downward to +0.5% from +1.2%. The Q1 core PCE price index was revised higher to +3.5% (q/q annualized), stronger than expectations of no change at +3.4%. US May capital goods new orders nondefense ex-aircraft and parts rose +1.7% m/m, stronger than expectations of +0.1% m/m and the largest increase in 4 months. The US May trade deficit of -$96.6 billion was wider than expectations of -$86.1 billion, a negative factor for Q2 GDP. US May pending home sales rose +1.8% m/m, stronger than expectations of +0.1% m/m. Richmond Fed President Barkin said he expects tariffs will put upward pressure on prices, and with so much still uncertain, he favors waiting for more clarity before adjusting interest rates. The dollar retreated today after the Wall Street Journal reported that President Trump may announce Fed Chair Powell's replacement as soon as September, an unusually early appointment. That reinforced expectations of a more dovish leaning Fed, after Trump criticized Powell for holding interest rates steady. Because Powell's term expires in May 2026, announcing a new Fed chair far earlier than the traditional three-to-four-month transition period could allow the chair-in-waiting to influence expectations about the likely path for interest rates. An overly dovish Fed would likely produce higher inflation, which depreciates the value of the dollar. The markets are discounting the chances at 25% for a -25 bp rate cut after the July 29-30 FOMC meeting. EUR/USD (^EURUSD) is up by +0.50% at a 3-3/4 year high. The euro rallied today after the dollar sank on reports that President Trump may name Fed Chair Powell's successor as soon as September, making Fed Chair Powell a lame duck before his term ends in May 2026, and fueling speculation that early Fed rate cuts are more likely. Gains in the euro are limited after the German Jun GfK consumer confidence index unexpectedly declined. The German Jun GfK consumer confidence index unexpectedly fell -0.3 to -20.3, weaker than expectations of an increase to -19.2. Swaps are discounting the chances at 9% for a -25 bp rate cut by the ECB at the July 24 policy meeting. USD/JPY (^USDJPY) today is down by -0.69%. The yen climbed toa 1-1/2 week high against the dollar today as the dollar tumbled after the Wall Street Journal reported that President Trump would name a successor to Fed Chair Powell sooner than expected, which fueled speculation the next Fed chair will be more dovish than Mr. Powell, a negative factor for the dollar. Today's slide in the 10-year T-note yield to a 7-week low is also bullish for the yen. August gold (GCQ25) today is down -15.70 (-0.47%), and July silver (SIN25) is up +0.289 (+0.80%). Precious metals today are mixed. Today's strength in stocks has reduced demand for safe havens in precious metals. Also, hawkish comments from Richmond Fed President Barkin weighed on gold prices when he said he favors waiting for more clarity before adjusting interest rates. In addition, today's report that showed weekly jobless claims fell more than expected is a hawkish factor for Fed policy and bearish for precious metals. Finally, reduced geopolitical risks in the Middle East are curbing safe-haven demand for precious metals as the ceasefire between Israel and Iran continues to hold. Today's downward revision to US Q1 GDP was negative for industrial metals demand and bearish for silver prices. Today's slump in the dollar index to 3-1/4 year low is a bullish factor for metals. Also, today's report from the Wall Street Journal that said President Trump is considering announcing Fed Chair Powell's replacement a soon as September has reinforced expectations of a more dovish leaning Fed, which boosts demand for precious metals as a store of value. Silver prices also have carryover support from today's rally in copper prices to a 2-3/4 month high. On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
Forbes
2 days ago
- Business
- Forbes
When Will Trump Name New Fed Chair? What To Know As He Eyes Powell Successor
Almost a year before Federal Reserve Chairman Jerome Powell's term is due to expire, President Donald Trump appears to be closing in on Powell's replacement, underscoring the butting of heads between the White House and the largely independent U.S. central bank. Donald Trump, left, and Jerome Powell are at odds over interest rates. Getty Images Trump has discussed naming Powell's successor by September, October or even sooner, The Wall Street Journal reported Thursday evening, citing anonymous sources. That is at least seven months before Powell's term as lead monetary policymaker is due to expire May 15, 2026, a seemingly extended amount of time for Powell to be a 'sitting duck.' Limited recent history suggests such an early announcement is rare. Among the only five Fed chairs of the last four decades, Paul Volcker was named a month before taking over in 1979, Alan Greenspan was named two months before taking over 1987, Ben Bernanke was named six months before taking over in 2006, Janet Yellen was named three months before taking over in 2014 and Powell was named three months before taking over in 2018. Though Trump appointed Powell during his first Oval Office run, Trump quickly soured on the Fed boss over his consistent demands for growth-focused and politically popular interest rate cuts. This year, Trump teased firing Powell, a move with shaky legal footing, before pivoting to name calling, calling Powell 'stupid' and a 'numbskull.' The Fed's most prominent role is setting the target federal funds rate, which only officially determines the rate at which financial institutions borrow from one another in overnight transactions, but heavily influences lending costs across the economy. The Fed sets interest rates based on its dual mandate system to keep inflation moderate and maximize employment among Americans. As inflation ravaged the global economy, the U.S. central bank hiked rates to a two-decade high by 2023, but began lowering rates in 2024 as inflation moderated. The Fed has not lowered rates since December 2024 even as inflation data appears moderate, pointing to the potential of higher inflation under Trump's tariffs. What Is A Shadow Fed Chair? On the 2024 campaign trail, now Treasury Secretary Scott Bessent planted the seed of a 'shadow' Fed chair, the already named successor to Powell who could undermine a still seated Powell by sharing their monetary policy stances. Bessent told Forbes he supported naming Powell's replacement to 'get forward guidance and let everyone know who the Fed chair is going to be.' A shadow Fed chair would 'serve one purpose: To undermine the credibility of the current Fed,' cautioned Sevens Report Founder Tom Essaye in a recent note. Trump told reporters Wednesday he's down to 'three or four' candidates to replace Powell. The Journal identified Kevin Warsh, a former Fed governor who has criticized Powell, and Kevin Hassett, the director of Trump's National Economic Council, as leading candidates. Bessent, former World Bank boss and Trump administration official David Malpass and Fed Governor Christopher Waller, who recently spoke in favor of rate cuts, are also in the mix, according to the publication. According to the Polymarket prediction platform, Warsh is the leading candidate to be the next Fed chair with 22% odds, followed by Waller at 21%, Hassett at 18% and Bessent at 13%. Forbes Can Trump Fire Jerome Powell? Federal Reserve Chair Thinks No As President Reportedly Eyes His 'Termination.' By Derek Saul Forbes The Fed Opts Not To Cut Interest Rates Again—Even As Trump Ups Attacks On Fed Boss Powell By Derek Saul
