The dollar rebounded significantly, and the Fed restarted interest rate cuts

The US dollar strengthened on Friday, continuing the rebound trend for most major currencies. The Fed cut interest rates this week but suggested a gradual easing policy will be adopted in the future, and traders are reevaluating the short-term outlook.

The Fed cut interest rates as expected on Wednesday, but did not show the urgency to quickly reduce borrowing costs in the www.xmtraders.coming months. Its interest rate forecast chart (i.e., the "dash map") shows that there may be two more interest rate cuts this year. "It's really a 'two-in' trading week. The voting results and dot charts are not as dovey as statements and concerns about the labor market," said Marc Chandler, chief market strategist at BannockburnForex. "We told customers that this is just a bounce back. If you have to sell the dollar, there will be a better price soon." U.S. Treasury Secretary Becent was interviewed to encourage the Fed's "dramatic" rate cuts. He said, "President Trump is very smart in economic governance, and I think he's right almost every time (criticizing the Fed). "The problem is that the Fed has been lagging behind the situation. We hope they can start catching up in a drastic way."

On Thursday, Kevin Hassett, the next popular candidate for the Federal Reserve Chairman and director of the White House National Economic www.xmtraders.commission, said that the Fed's 25 basis points cut rate is a good first step towards a significant reduction in interest rates. Analysts believe that Hassett's words indicate that the Federal Reserve's decision to cut interest rates seems to be recognized by the White House.

Analysts believe that the Fed's 25 basis points cut rate can be regarded as a buffer and a statement, and the dissatisfaction arising from the White House through partial concessions.

ADMInv"After Wednesday's rate cut sent mixed signals to the market, the market currently expects the Fed to cut interest rates in October at 92%.

The pound fell on Friday as the scale of UK borrowing far exceeds official forecasts, further exacerbating uncertainty about fiscal outlook.

Forex Market:The US dollar index generally showed a pattern of falling first and then rising this week. At the beginning of the week, driven by market expectations of the Federal Reserve's interest rate cut, the US dollar index fell continuously, falling to a low of more than ten weeks. On Wednesday, the Federal Reserve cut interest rates by 25 basis points as scheduled. Powell emphasized that this time was a "risk management" operation. The US dollar rebounded quickly after a short-term dive and regained the 97 mark. After the initial unemployment claims data were released on Thursday, although statistical errors caused volatility, the overall market interpretation was that the labor market was still resilient, and the US dollar rose again, closing at 97.67 this week, up 0.04%. In terms of non-US currencies, affected by the trend of the US dollar, the British pound, the euro, and the Australian dollar all showed a trend of rising first and then falling. Among them, the euro rose to a four-year high against the US dollar. Although the euro zone economy showed some signs of weakness, the policy was stable and there was no sign of a sharp cut in interest rates, which allowed the euro to support the difference between interest spreads and expectations. The US dollar is expected to close higher overall against the Japanese yen, but the increase is limited and accompanied by large fluctuations. On Friday, the Bank of Japan kept interest rates unchanged, but two www.xmtraders.committee members voted to support a 25 basis point hike.

Gold Market:Spot gold rose first and then fell this week. Although it hit a historical high again, it finally fell due to the rebound of the US dollar, and the fluctuations in the week were extremely severe. At the beginning of the week, the market's expectations of interest rate cuts and safe-haven demand supported the gold price to hit a new high. In the early morning of Thursday, gold hit a record high to $3,707 and then fell, and then showed a significant correction, but it still recorded a 1.14% increase throughout the week, closing at $3,685.07 per ounce on Friday, closing higher for the fifth consecutive week.

Crude oil market: International oil prices are affected by the repeated interweaving of geopolitical risks and supply and demand expectations. At the beginning of the week, international oil prices have continued to rise due to supply concerns caused by Ukraine's attack on Russia's energy facilities and conflicts in the Middle East. However, with the mid-week U.S. inventory report was negative, coupled with weak demand outlook and expectations of oversupply heated up, WTI and Brent crude oil turned to continuous declines.

Review of the weekly news

1. The Federal Reserve cut interest rates by 25 basis points. Is Trump satisfied?

The Fed announced a 25 basis point cut this week, with interest rates falling to the range of 4.00%-4.25%, a move marking a restart of the pace of interest rate cuts that have been suspended since December last year. Despite this, there are still differences within FOMC regarding the extent of interest rate cuts, and the newly appointed director Milan advocates that a 50 basis point cut should be cut.

About future interest rate paths, the median Fed dot chart shows that it is expected to cut interest rates twice this year, one more than the expected rate cut in June. Specifically, among the 19 officials,Nine people expect to cut interest rates twice this year, two are expected to cut interest rates again, six are expected to cut interest rates again, one believes that interest rates should be kept unchanged throughout the year, and one believes that interest rates need to be cut by another 125 basis points this year. The forecast for interest rate cuts in 2026 remains once.

Powell stressed that this rate cut is a risk management rate cut, and the downward risks of the labor market are the focus of this decision, but there is no need to quickly adjust interest rates. Decisions will be made based on the latest data in the future.

Powell also pointed out that the current slowdown in the U.S. economic growth mainly reflects the slowdown in consumer spending. In terms of inflation, the transfer of tariffs to consumers has already occurred, but it is smaller than expected. In terms of employment, the annual employment data revisions are almost exactly in line with expectations, but the revised employment data means that the labor market is no longer stable.

In terms of political influence, Powell was firmly www.xmtraders.committed to the independence of the Federal Reserve, responding to Milan's influence on interest rate resolutions that the only way a single voter could have an impact is to make a very persuasive argument. He also said that there was no consideration for inclusion in the "third mission" in other ways.

Before the Fed's interest rate meeting, U.S. President Trump said he should cut interest rates significantly this week. But he has not www.xmtraders.commented directly after the interest rate decision.

White House National Economic www.xmtraders.commission Director Hassett recognized the Federal Reserve's decision to cut interest rates by 25 basis points on Thursday, which is a good first step towards the right direction of lower interest rates. Hassett said it was an appropriate move to assess the current various economic variables and decide to make a progressive rate cut.

He also stressed that Milan's analysis is "heartfelt - not dependent on any partisan influence from the White House" and that Milan will become an independent Fed director.

2. Trump's "double standard" operation is exposed: Cook's mortgage dispute with Treasury Secretary Becent

U.S. President Trump has requested the Supreme Court to allow him to remove Federal Reserve Director Lisa Cook during the lawsuit. This move has officially involved the Supreme Court in disputes over the independence of the central bank.

The U.S. government lawyer and deputy attorney general pointed out in the documents submitted to the Supreme Court that Cook had fraudulent behavior in the mortgage loan, which provided the president with a sufficient "reason" to fire her. He stressed that the president has the right to remove the Fed from his post based on the "for reasons" clause, and that Cook's behavior does not qualify as a Fed director.

Cook's lawyer submitted a response urging the justice to dismiss Trump's request. They pointed out that the allegations involved Cook's actions before taking office and did not meet the conditions for dismissal of the Federal Reserve Act for "for some reason". Cook believes that her position is protected by law and should not be removed from office at will.

Foreign media also reported that mortgage documents show that US Treasury Secretary Bescent also used two different properties as his "main residence" in 2007, similar to the mortgage fraud mentioned by Trump when he tried to remove Cook, but analysis said there were differences between the two.

BelsonThe mortgage was signed by his lawyer, and both loans came from the same bank, while Cook signed it himself, and the loan came from different banks. Additionally, Becente is a wealthy hedge fund manager and it is not difficult to get a loan, while Cook's situation is different.

Nevertheless, both have evidence that this inconsistency has not misled lenders.

3. Trump once again mentioned the "end quarterly financial report". Will this be successful?

This week, Trump once again called on the Securities and Exchange www.xmtraders.commission (SEC) to allow listed www.xmtraders.companies to release regular information disclosures every six months, rather than the current quarterly reporting system. He believes the change will cut www.xmtraders.company costs and enable management teams to focus on long-term goals.

Trump made similar calls in the middle of his first administration, but at that time, the SEC eventually retained the existing system because the agenda was already crowded and the COVID-19 pandemic overturned the administration's priorities.

This time, however, the probability of the proposal being successful has increased significantly. On the one hand, SEC Chairman Paul Atkins, a free-market Republican who criticizes cumbersome corporate rules, has worked closely with the White House to promote a series of major policy changes, including cryptocurrencies and SEC employee cuts. On the other hand, the White House has reviewed the SEC's regulatory agenda and has been pushing for its reforms in other areas.

In addition, Atkins will face a more friendly congressional and conservative court system and will have more time to www.xmtraders.complete the usually long rulemaking process.

4. Is the US government going to shut down again? The Democrats use medical insurance to "hardly fight" the Republican Party

The US government faces a crisis of shutdown on October 1, and Democratic senior officials are considering adopting a tough strategy to link medical insurance issues with government funding to prevent Trump's policy agenda and win public attention.

Earlier, Democrats succumbed to the temporary appropriation bill for fear of Trump's popularity, but now the grassroots of the party are dissatisfied with soaring premiums for health insurance programs and cutting Medicare, urging leadership to take action. Democrats have proposed extending Obamacare subsidies and revoking Medicaid cuts passed in July, but Senate Majority Leader John Thunn considers the proposal "absurd" and refuses to negotiate with Democratic leader Chuck Schumer.

The two sides have not conducted substantial www.xmtraders.communication so far, and the stalemate continues. If the government does shut down, it will be very difficult to solve, especially if Trump sees it as an opportunity to strengthen executive power.

After the 5.50% tariff, US-India trade relations ushered in a turning point

The trade relations between the United States and India have shown signs of easing recently. On September 16, the two sides restarted a new round of bilateral trade agreement negotiations in New Delhi. Trump is also reported to have a phone call with Indian Prime Minister Modi and wishes the latter a happy birthday.

India gave positive www.xmtraders.comments on the negotiations, believing that it is "positive" and "foresight". In a subsequent statement, the Indian government said it had decided to addMake great efforts to reach a reciprocal trade agreement to promote the development of trade cooperation between the two sides to a deeper level.

Previously, the Trump administration decided to impose a 50% tariff on Indian imported products, a move that had a significant impact on the trade relations between the two sides.

This round of trade negotiations was originally scheduled to be held from August 25 to 29, and was postponed due to the United States imposing tariffs on Indian goods. Trump said he would meet with Indian Prime Minister Modi in the www.xmtraders.coming weeks and expressed optimism about www.xmtraders.completing a trade agreement. Modi responded that Washington and New Delhi are "close friends and natural partners" and that the two teams are working hard to www.xmtraders.complete trade negotiations as soon as possible.

The issue of market access between industry and animal husbandry has always been the main obstacle to US-India trade negotiations. India insists on protecting the interests of its own farmers and refuses to allow lower-priced American agricultural products to impact its own market.

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