EU: Germany's Merz-'Signs US Could Be Interested In EU Tariff Deal'

S&P futures dip to session lows with Treasuries ticking up following President Trump's latest Truth Social missive on Fed rate policy. Trump says that "preemptive" rate cuts are being "called for by many", and labels Fed Chair Powell "Mr. Too Late, a major loser". Notably, he also warns of a "SLOWING of the economy" if the Fed doesn't cut rates "now", and appears to accuse the rate cuts last year as being politically motivated.

• In other words, the White House doesn't appear to be backing down from its criticism of the Fed, which is weighing on investor perceptions of US monetary policy independence - we covered last week's developments on this front in our US Macro publication out Friday (PDF).
• @realDonaldTrump:“Preemptive Cuts” in Interest Rates are being called for by many. With Energy Costs way down, food prices (including Biden’s egg disaster!) substantially lower, and most other “things” trending down, there is virtually No Inflation. With these costs trending so nicely downward, just what I predicted they would do, there can almost be no inflation, but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW. Europe has already “lowered” seven times. Powell has always been “To Late,” except when it came to the Election period when he lowered in order to help Sleepy Joe Biden, later Kamala, get elected. How did that work out?"

CNBC anchors trying to pin down Chicago Fed President Goolsbee (2025 voter, dove) on the impact of President Trump potentially replacing Fed Chair Powell - Goolsbee won't be drawn into the speculation but he is emphatic that central bank independence is crucial to keeping longer-run inflation expectations down.

• Goolsbee says without central bank independence, you get "higher inflation, worse growth, higher unemployment." And he cites Paul Volcker's example of tightening policy to quell inflation, saying "sometimes the Fed has to do the hard job".
• That said, asked if he still sees rates being lower 12 - 18 months from now: "I still think that", identifying the March Dot Plot as a guide to the overall direction of rates.

• 11,179 TYM5 108/111 2x1 put spds, 32 ref 110-25.5