Home

Stocks surged to an all-time high after Fed Chairman Powell’s congressional testimony was overwhelmingly construed as paving the way for a rate cut at the end of the month. Citing renewed uncertainties surrounding trade, business investment and inflation, the chairman said conditions had deteriorated since the May Federal Open Market Committee (FOMC) meeting. While markets had discounted the possibility of a half point reduction this month following the strong June jobs report, those expectations re-emerged following Powell’s testimony, with futures now showing 25 percent odds of a half-point cut and 100 percent odds of at least a quarter-point cut. Markets also shrugged off the stronger than anticipated June core Consumer Price Index (CPI) reading, focusing instead on the chairman’s speculation that weak inflation could be more persistent than expected.

The long-awaited meeting between presidents Trump and Xi has concluded with the two sides agreeing to resume trade negotiations. The U.S. indefinitely suspended the imposition of new tariffs but left in place those already in effect. The U.S. also agreed to allow the resumption of certain technology sales to Huawei, a precondition upon which the Chinese insisted. And the Chinese agreed to buy more U.S. agricultural products.