In the latest Federal Open Market Committee (FOMC) meeting, a majority of Federal Reserve officials supported a 50 basis point rate cut, citing inflation moving closer to the Fed's target and a weakening labor market as key factors. This group believed a larger reduction was necessary to stabilize the economy.
However, some participants favored a more cautious 25 basis point cut, arguing that it would provide sufficient monetary easing without being overly aggressive. Another perspective emphasized that the overall direction of rate cuts was more important than the size of the initial reduction, suggesting that the broader trajectory of monetary policy would have a greater long-term impact.
Source: Federal Reserve
Dollar Gains During Tensions But Fed Stays Cautious (23 - 27 June)The US dollar index slipped late in the week but ended higher on safe-haven demand as Israel-Iran tensions grew. Trump gave Iran two weeks to halt its nuclear program. The Fed held rates and signaled two cuts in 2025, warning tariffs could lift inflation. EUR/USD was flat. The dollar rose early, then eased, helping the euro recover. Lagarde’s comments reinforced a hawkish ECB outlook. The pound weakened after the BoE held rates with a split vote. The yen rebounded toward 145 on strong inflation data but still posted weekly losses.
Detail Dollar Faces Pressure, Precious Metals Retreat (06.20.2025)EUR/USD hovered near 1.1520 on Fed hawkishness and rising Middle East tensions, while demand offered potential support to the dollar.
Detail Markets React to Hawkish Fed and Geopolitical Tensions (06.19.2025)The U.S. dollar strengthened on Thursday as the Fed signaled fewer rate cuts ahead, citing inflation risks and geopolitical uncertainty. EUR/USD fell near 1.1465, while the yen weakened and GBP/USD slipped toward 1.3410.
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