Many Fed officials saw stronger case for rate cut last month

Many Fed officials saw stronger case for rate cut last month

Gold futures are trading higher on Thursday shortly before the regular session opening, but prices are retreating from its earlier high, which fell well short of a pair of main tops at $1441.00 and $1442.90.

Apparel, which has been volatile in recent months, rose 1.1% on the month, while dropping 1.3% annually.

US shares had previously hit record highs after Federal Reserve Chairman Jerome Powell confirmed the USA central bank stood ready to "act as appropriate" in response to risks to the US economy, including disappointing factory activity, tame inflation and a simmering trade war with China.

The minutes echoed that sentiment: "several participants pointed out that they had revised down their estimates of the longer-run normal rate of unemployment and, as a result, saw a smaller upward contribution to inflation pressures", and a better case for lower rates.

The other currencies to have gained against the USA dollar are the South Korean Won (0.85%), the Japanese Yen (0.5%), the Indonesian rupiah (0.5%), the Philippines peso (0.46%), the Taiwan dollar (0.37%), the Thai Baht (0.31%), the Malaysian ringgit (0.27%), the Singapore dollar (0.24%,) and the China Offshore 0.11% and the China Renminbi (0.11%). Gold rallied and USA equity markets hit record highs.

A quarter-point reduction on a $30,000 home equity line of credit would shave the monthly payment by $6.25, McBride says. The market also began to price a 58% chance of a 50-basis point cut. Of course, President Trump wants rates lower as do financial market investors.

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

"If you got a call from the President, today or tomorrow, and he said 'I'm firing you, pack up, ' what would you do?"

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This means a July rate cut is nearly certain, by at least 25 basis points, maybe even more, but even James Bullard, the noted dove and St. Louis Federal Reserve President in a speech at the same time as Powell's stated that 50 basis points would be "overdone" and that a 2nd cut later in the year should be enough.

Following June's solid increase in the core CPI, Fed officials will be watching to see if that translates into a rebound in both consumers' and market-based inflation expectations, which have dropped over the past year.

Shelter costs, which make up about a third of total CPI, rose 0.3% on the month, as did owners-equivalent rent, one of the categories that tracks rental prices. But over the last decade, the Federal Reserve has been banging the inflation beehive with a baseball bat and the bees haven't come out.

Bullard also pushed for the Fed to take "insurance" against an economic shortfall.

In his prepared statement, Powell said that since Fed officials met last month, "uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the USA economic outlook".

The CPI data is going to drive Treasury yields, and yields will drive the U.S. Dollar.

Bond prices moved modestly lower early in the session and slid more firmly into negative territory as the day progressed.

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