US Fed chief says trade and global growth remain big risk factors

25 basis point cut priced in. Will he go further

Gold rallied and US equity markets hit record highs.

But since criticism of the Fed by Mr Trump in May, both investors and the central bank have begun shifting their stance, with markets now expecting a cut of at least a quarter of a percentage point when Fed policymakers meet at the end of the month.

- United States dollars supported by inflation surprise but data won't prevent Fed cuts.

"They raised rates too soon, too often, & tightened, while others did just the opposite", Trump tweeted Friday, adding that the Fed "doesn't have a clue!"

President Trump has repeatedly argued that the USA economy would be growing faster if the Fed lowered interest rates.

"I would argue for a 25-basis point cut at the next meeting", Bullard told reporters on Wednesday.

Stocks notched fresh highs - with the S&P briefly topping 3,000 for the first time ever - after the Fed signaled it's poised to cut interest rates for the first time in more than a decade, citing worries over trade tensions and growth.

The dollar, however, trimmed losses against the yen and euro earlier on Thursday after data showed US underlying consumer prices rose 0.3% in June, the most in almost 1-1/2 years, with solid gains in the costs of a range of goods and service.

The headline June producer price index (PPI) is expected to register as flat month-over-month for June, according to consensus economists polled by Bloomberg, retreating from a 0.1% month-over-month increase in May.

"There's no immediate need to move rates in either direction at this point in my view", Federal Reserve Bank of Philadelphia President Patrick Harker said in an interview with the Wall Street Journal on Monday.

The Fed has kept its current benchmark overnight interest rate in a range of between 2.25 percent and 2.50 percent since December.

The Fed chair said overall growth has also "moderated", and cited the possibility that "weak inflation will be even more persistent than we now anticipate".

"Concerns about the strength of the global economy continue to weigh on the USA outlook", Mr Powell said. "What we'd like to do is take out some insurance against the possibility of a sharper-than-expected slowdown".

A man counts USA dollars in Tehran, Iran July 7, 2019.

With Fed rate cut odds climbing again, the US Dollar (via the DXY Index) has been knocked lower, keeping the threat of a major US Dollar top in place. Furthermore, Powell is set to testify for a second day.

Furthermore, while adding onto his previously mentioned thoughts about Bitcoin as having the potential to transition the USA into a new era of banking and finance, Powell also explained that he believes BTC's main utility presently is being a store of value, much like gold.

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