The US Federal Reserve reinforces a potential rate cut in July, citing a slowing global economy and no domestic inflation risk as drivers.
The Fed minutes echoes statements made by chairman Jerome Powell to Congress who added that inflation may, in fact, be too low and «somewhat below levels consistent with the Committee’s 2 percent inflation objective».
The consensus view based on the futures market was already expecting a 25 basis point rate cut but traders upped the ante on a potential 50 basis point reduction—a possibility that was presented to Powell who didn’t directly respond.
Trump attacks Fed
Meanwhile, President Trump continues his public campaign against the Fed over rates being too high, openly claiming to explore ways to replace the chairman.
«My answer would be no,» Powell said in response to a question by a US senator regarding whether or not he would comply with instructions by the US president to step down. «The law clearly gives me a four-year term and I intend to serve it.»
