August 6 International Forex News

Trump Treats Warsh as an "External Adviser" and Has Called Him Several Times About Economic Issues

August 6: According to The Wall Street Journal, people familiar with the matter said President Trump has spoken with Warsh several times since Warsh became Fed chair, breaking past communication norms between the president and the head of the central bank. The people said calls between Trump and Warsh were sometimes frequent, with multiple calls within a few days, while at other times there were long periods of silence. Some people familiar with the matter said Trump sought Warsh's views on a range of issues, including the economic impact of the Iran war and the rapid development of artificial intelligence. It is unclear whether Trump and Warsh discussed monetary policy. One person familiar with the matter insisted that the president never mentioned interest rates. Some people familiar with the matter said Warsh often expressed optimism about the economy in conversations with Trump, echoing his public remarks. Trump has told his political allies that he sees Warsh as an important external economic adviser. One person who heard Trump speak said Trump often praised the Fed chair's appearance after seeing Warsh on television. Trump's relationship with Warsh may raise concerns about the Fed's independence.

Probability of a 25-Basis-Point Fed Rate Hike in September Stands at 54.4%

August 6: According to CME FedWatch, the probability that the Federal Reserve will keep interest rates unchanged by September is 45.6%, while the probability of a cumulative 25-basis-point rate hike is 54.4%. By October, the probability of rates remaining unchanged is 33.5%, the probability of a cumulative 25-basis-point rate hike is 52.1%, and the probability of a cumulative 50-basis-point rate hike is 14.5%.