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• I would like us to get a read on whether tariffs are hurting productivity
• Imported goods are only 11% of GDP so the impact of tariffs could potentially be modest
• We’ve got short-run inflation expectations up, but long-run expectations not rising is very important
• We have to get through the ‘wait it out’ impulse around tariffs and trade
• We need to wait it out to figure out what to do
• If tariffs were a certain one-off without retaliation or supply chain problems, then I would lean towards cuts
• Highlights that tariffs haven’t helped steel production, instead there are layoffs
• Fed chair is most important person at the table, their opinion carries a lot of weight
• There is a lot of dust in the air but ultimately think we can lower rates “if we can just get back on that path”
• Still believe rates will be lower in 12-18 months

Citigroup has shifted its call this morning on the Fed, seeing the next cut in June rather than May. They still see 125 bps in cuts this year.

There wasn’t much of anything new here.

This article was written by Adam Button at www.forexlive.com.

Gold is now up $75 on the day to a fresh record just above $3400.

The monthly chart is harrowing as it goes parabolic.

Here is what’s driving it:

1. The global world order is breaking down
2. The market wants safety from the US dollar
3. Global economic growth indicators are worsening
4. Trump is threatening the independence of the Fed
5. AI/robotics are ultimately deflationary and central banks will need to cut, particularly if the trade war cripples economies

With the rally today, gold is up nearly 15% since April 7.

This article was written by Adam Button at www.forexlive.com.

The Japanese yen came flying out of the gates on Monday. In the European session, USD/JPY is trading at 141.00, down 0.79%. Earlier the yen strengthened to 140.47, its strongest level since Sep. 2024. US dollar retreats as Trump pushes against Powell The US dollar has posted losses against the major currencies on Monday, including […]

The post Yen Surges to Five-Month High as US Dollar Under Pressure appeared first on Action Forex.

The US dollar had 99 problems last week but rising bond yields weren’t one.

That’s changed so far this week as US 30-year yields have climbed 9 basis points to 4.89% to start the new week.

Of all the risks that the market is concerned about at the moment, the one I think is underestimated is the US deficit. The battle lines over the Republican budget are shaping it up and it’s looking like the tax cut camp is going to beat up on the fiscal hawks and there will be a budget deficit of 8-9% of GDP — and that’s before taking into account the possibility of a recession.

The long bond is likely looking deep into the future and doesn’t like what it sees. If 30s get back above 5% this week then we might be looking at an ugly picture in US equities.

This article was written by Adam Button at www.forexlive.com.

The GBP/USD pair rallies to near 1.3400 during European trading hours on Monday, the highest level seen in seven months. The Cable strengthens as the US Dollar (USD) has been battered by the threat to the Federal Reserve’s (Fed) independence after United States (US) President Donald Trump.

The Federal Reserve (Fed) will enter the blackout period on April 26 before holding a two-day meeting on May 6-7. Markets widely expect the Fed to hold its policy rate unchanged, with the CME FedWatch Tool’s probability of a 25 basis points (bps) at the May meeting holding around 10%.