FED: Latest Trump-Fed Deliberations
- Governor positions: Trump yesterday appeared to suggest in a cabinet meeting press conference that the administration could nominate Stephen Miran to "fired" Governor Cook's Board position (expiring in 2038), instead of ex-Gov Kugler's vacant spot (whose term ends in January before requiring renewal). Politico reports Miran’s nomination hearing is expected next week.
- Trump also made it clear he is looking to have a "majority" on the Fed Board "very shortly", with the aim to bring down interest rates.
- Two separate articles published in quick succession point to multiple angles being pursued by the Trump administration to exert more influence on the composition of the FOMC.
- The WSJ cited "people familiar with the matter" as saying President Trump wants to "move quickly to announce a nominee" to succeed Cook. One potential candidate is ex-World Bank President David Malpass.
- Regional Fed presidents: Echoing concerns by Brainard from earlier in the day, Bloomberg wrote that the Trump administration is "reviewing options for exerting more influence over the Federal Reserve's 12 regional banks that would potentially extend its reach beyond personnel appointments in Washington, according to people familiar with the matter." It’s ahead of the once-in-five-year exercise of authorizing reserve bank presidents in February.
- MNI Exclusive: With Miran’s growing likelihood at being placed in a longer-term Governor position, the MNI policy team’s latest interview with him from yesterday carries even more weight. See MNI INTERVIEW: US Growth, Jobs Poised For Rebound – Miran (1345ET) followed by Transcript of MNI Interview with CEA Chair Stephen Miran (1557ET)
- Fed Statement: A Federal Reserve statement yesterday indicated that the Fed's position is that Board Governors can only be removed "for cause", and that while Cook " has indicated through her personal attorney that she will promptly challenge this action in court and seek a judicial decision that would confirm her ability to continue to fulfill her responsibilities", the Fed will "abide by any court decision". “Long tenures and removal protections for governors serve as a vital safeguard”.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
OUTLOOK: Price Signal Summary - Bull Cycle In S&P E-Minis Remains In Play
- In the equity space, S&P E-Minis have traded to fresh cycle high today. The climb confirms a resumption of the uptrend and maintains the price sequence of higher highs and higher lows. Sights are on 6477.31, a 1.618 projection of the May 23 - Jun 11 - 23 price swing. Support at the 20-day EMA is at 6302.01.
- The trend condition in EUROSTOXX 50 futures remains bullish and short-term weakness for now, appears corrective. Support at 5281.00, the Jul 1 / 4 low, remains intact. For bulls, a resumption of gains would refocus attention on key resistance and the bull trigger at 5486.00, the May 20 high. It has recently been pierced, a clear breach of it would resume the bull cycle and open 5500.00.
EURUSD TECHS: Trades Through The 20-Day EMA
- RES 4: 1.1923 2.000 proj of the Feb 28 - Mar 18 - 27 price swing
- RES 3: 1.1917 2.0% 10-dma envelope
- RES 2: 1.1851 High Sep 10 2021
- RES 1: 1.1749/1829 High Jul 24 / 01 and the bull trigger
- PRICE: 1.1665 @ 10:40 BST Jul 28
- SUP 1: 1.1658 Intraday low
- SUP 2: 1.1559/57 50-day EMA / Low Jul 17
- SUP 3: 1.1446 Low Jun 19
- SUP 4: 1.1405 Low Jun 11
EURUSD is trading lower today. The pair has breached support at the 20-day EMA, at 1.1684. The next key support to watch lies at the 50-day EMA, at 1.1559. A clear break of this average is required to signal a stronger reversal. Note that medium-term trend indicators continue to highlight a dominant uptrend. A resumption of gains would refocus attention on 1.1829, the Jul 1 high and the bull trigger.
ECB: Kazimir Doesn’t See Anything Forcing ECB To Cut As Soon As September
Bloomberg runs the below headlines from ECB’s Kazimir in an op-ed for the Slovakia central bank’s website.
- "*KAZIMIR: DON'T EXPECT ANYTHING FORCING ECB CUT AS SOON AS SEPT." - BBG
- "*KAZIMIR: UPSIDE INFLATION RISKS PERSIST, WARRANT VIGILANCE"
- "*KAZIMIR: TRADE DEAL `WELCOME NEWS,' CAN HELP LIFT UNCERTAINTY"
- "*KAZIMIR: MAJOR HIT TO LABOR MARKET COULD FORCE ECB ACTION"
- "*ECB'S KAZIMIR: PRE-COMMITTING WOULD BE A `FOOL'S ERRAND'"
This is the first update in over a month for Kazimir, with his latest two-sided comments broadly in keeping with his prior outlook. From Jun 24: “I belong to the governors who think we’ve reached our goal, that we are at the neutral range,”….“I personally would not touch rates before we’ll have a much clearer picture regarding trade-war scenarios.”
Sources pieces since last week's ECB meeting have touched on the high bar seen for the September meeting (for which there is currently just 4bp of cuts priced vs 10bp prior to Thursday's ECB press conference).
