FED: NY's Williams: Labor Market Solid, "At Some Point" Need To Ease Policy
NY Fed President Williams (permanent FOMC voter) on CNBC doesn't sound particularly concerned about the state of the labor market, in particular downplaying the weak nonfarm payrolls growth implied by the July employment report's downward revisions. While not contradicting Fed Chair Powell's apparent Jackson Hole signal of a likely September cut, which was based largely on a shift in the balance of risks to employment, Williams doesn't make the case for a cut here.
- Williams: "I think the state of the labor market is solid. We've definitely seen a slowdown in the pace of hiring, in payroll growth, as you mentioned. I think some of that is really a slowdown in the supply of labor...we're seeing slower supply and slower demand. And the hard thing to do is to figure out well, is, is one slowing more than the other? The test of that is kind of the unemployment rate. The unemployment rate has been pretty, pretty steady, low 4s. Hasn't really changed over the last 12 months. Other indicators, I think, have, I would say, gently softened over the past year, but again, still a solid labor market." Meanwhile, "wage growth continues to be, I would say, consistent with a solid labor market and inflation coming down towards our 2% goal. "
- Asked if he wouldn't "hit the panic button" if payroll growth remained weak, instead paying attention to the unemployment rate, wage growth and other gauges, Williams said "that's absolutely right... [but] if payroll growth became very negative.. that's, I think that's telling you something different." When asked, he doesn't provide an estimate of "breakeven" payrolls gains.
- Asked if he's on board with a rate cut: "in my view, if the economy evolves in the way I hope it will, and that means that inflation, you know, after adjusting for the tariff inflation comes down over the next couple of years, the economy stays in relatively good balance, I do think at some point we need to move interest rates closer to normal or or a neutral stance. We are still in a, I would say, modestly restrictive stance."
- And specifically about a September cut: "I definitely think that every meeting is [on the table] from my perspective... again, the risks are more in balance, and we have to just see how kind of have the data play out."
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FRANCE T-BILL AUCTION RESULTS: 13/28/38/50-Week BTFs
| Type | 13-week BTF | 28-week BTF | 38-week BTF | 50-week BTF |
| Maturity | Oct 29, 2025 | Feb 11, 2026 | Apr 22, 2026 | Jul 15, 2026 |
| Amount | E2.998bln | E1.8bln | E600mln | E1.845bln |
| Target | E2.6-3.0bln | E1.4-1.8bln | E0.2-0.6bln | E1.5-1.9bln |
| Previous | E3.099bln | E1.598bln | E483mln | E1.998bln |
| Avg yield | 1.977% | 1.973% | 1.961% | 1.968% |
| Previous | 1.938% | 1.935% | 1.930% | 1.902% |
| Bid-to-cover | 4.21x | 3.57x | 6.38x | 4.39x |
| Previous | 3.13x | 2.78x | 7.65x | 2.78x |
| Previous date | Jul 21, 2025 | Jul 21, 2025 | Jun 16, 2025 | Jul 21, 2025 |
AUDUSD TECHS: Approaching Support At The 50-Day EMA
- RES 4: 0.6700 76.4% retracement of the Sep 30 ‘24 - Apr 9 bear leg
- RES 3: 0.6688 High Nov 7 ‘24
- RES 2: 0.6677 0.764 proj of the Jun 23 - Jul 11 - 17 price swing
- RES 1: 0.6625 High Jul 24
- PRICE: 0.6528 @ 13:48 BST Jul 28
- SUP 1: 0.6516 Intraday low
- SUP 2: 0.6505/6455 50-day EMA / Low Jul 17
- SUP 3: 0.6373 Low Jun 23 and a bear trigger
- SUP 4: 0.6357 Low May 12
Last week’s fresh trend highs in AUDUSD reinforce bullish conditions and the latest pullback is considered corrective. Gains have resulted in a print above key short-term resistance at 0.6595, the Jul 11 high and bull trigger. This marks a resumption of the uptrend and sights are on 0.6688, the Nov 7’ 24 high. Support to watch is at the 50-day EMA, at 0.6505. A clear break of this EMA would highlight a stronger reversal.
US-CHINA: Delegations Arrive At Venue For Third Round Of US-China Trade Talks
A Chinese trade delegation, led by Vice Premier He Lifeng, and a US delegation, led by Treasury Secretary Scott Bessent, have arrived at the venue in Stockholm, Sweden, for the third round of trade talks.
- MNI noted in the Political Risk Week Ahead that there is increasing speculation that another 90-day extension will be agreed upon to avoid the imposition of 100%+ tariffs. SCMP reported overnight that another 90-day pause is expected, during which time “the two nations will commit to not impose additional tariffs on each other, nor escalate the trade war by other means.”
- During a press conference with European Commission President Ursula von der Leyen yesterday, Trump said the US is “very close to a deal with China." Trump added: “We really sort of made a deal with China, but we’ll see how that goes.”
- A breakthrough in talks could facilitate a meeting between Trump and Chinese President Xi Jinping in the Autumn. Trump said on Friday he would likely visit China at Xi’s invitation in the “not too distant future.”
- Discussions are likely to focus on thorny issues related to tech and critical mineral export controls, and Chinese purchases of sanctioned Russian and Iranian oil. Beijing is expected to press the US to reduce tariffs related to Fentanyl.
- FT reported earlier: “The US has frozen restrictions on technology exports to China to avoid hurting trade talks with Beijing and help [Trump] secure a meeting with [Xi]..."
