FED: Trump: "Productive Talk" On Rates With Powell, No Pressure On Him To Quit

June's Conference Board consumer survey added another data point to the recent signs of diminishing near-term inflation expectations vs peaks in April.

• The Conference Board average 1Y inflation expectation dipped to 6.00% from 6.40%, with the median falling to 4.90% from 5.20%. Those compare to April's peaks of 7.00% / 5.90%, respectively albeit remain elevated versus levels seen before the specter of tariffs.
• The UMichigan survey's 1Y reading peaked in May at 6.60%, falling to 5.10% in June.
• Meanwhile the NY Fed's 1Y appears to have peaked in April at 3.63%, falling to 3.20% in May (their June survey is out on July 8).
• The Atlanta Fed's 1Y business expectations, too, have pulled back, to 2.42% in June from the April peak of 2.76%.
• While FOMC officials are typically more concerned with de-anchoring longer-term expectations, there has been some concern that the sharp jump in nearer-term indices could bode ill for overall inflation dynamics. For instance Fed Gov Barr noted that "Higher short-term inflation expectations, supply chain adjustments, and second-round effects may cause some inflation persistence".
• In this regard a continued pullback in short-term inflation expectations would be likely to bolster officials' comfort to ease in the coming months.

In opening remarks at a Fed Listens event Tuesday, Fed Gov Barr (permanent voter) appears to be aligned with Chair Powell in expecting inflation to pick up in future due to tariffs (text here). Additionally, he makes note of concern over inflation persistence. 

• Judging from his brief comments, he is not part of the evidently small minority (so far, Gov Waller and VC Bowman) who see tariff-related inflation as likely transitory and unlikely to be high enough to preclude cuts as soon as the July meeting.
• Barr: "The economy is currently on a sound footing, with low and steady unemployment, and disinflation having continued at a gradual, albeit uneven, pace toward our 2 percent target. Looking forward, however, I expect inflation to rise due to tariffs. Higher short-term inflation expectations, supply chain adjustments, and second-round effects may cause some inflation persistence. At the same time, tariffs may cause the economy to slow and unemployment to rise. There is still considerable uncertainty about tariff policies and their effects. Monetary policy is well positioned to allow us to wait and see how economic conditions unfold."
• This is rare commentary on monetary policy for Barr, who until the end of February was the Fed's Vice Chair for Supervision (he's since been replaced by Bowman). 

• RES 4: 1.4111 High Apr 4
• RES 3: 1.4016 High May 12 and 13 and a key resistance 
• RES 2: 1.3920 High May 21 
• RES 1: 1.3825 50-day EMA
• PRICE: 1.3713 @ 16:51 BST Jun 24
• SUP 1: 1.3635 Low Jun 18  
• SUP 2: 1.3540/3528 Low Jun 16 / 1.0% 10-dma envelope
• SUP 3: 1.3503 1.618 proj of the Feb 3 - 14 - Mar 4 price swing
• SUP 4: 1.3473 Low Oct 2 2024

A primary downtrend in USDCAD remains intact and recent gains appear corrective. Resistance at the 20-day EMA, at 1.3713, has been breached. A continuation higher would signal scope for a stronger retracement. Pivot resistance to monitor is at the 50-day EMA, at 1.3825. Key support and the bear trigger has been defined at 1.3540, the Jun 16 low. Clearance of this price point would resume the downtrend.