BNY Mellon: The urgency for further tightening by the Federal Reserve has diminished.
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Bitunix analysts: The Federal Reserve has downplayed policy guidance, with "uncertainty premium" becoming the main battleground, rather than the interest rate path.
According to BlockBeats, on July 7th, the focus of global markets is gradually shifting from interest rate direction to policy communication methods. Federal Reserve Governor Waller stated that forward guidance should not be a fixed framework and could even be completely eliminated if necessary, reiterating that the central bank will not deliberately maintain low interest rates to address government fiscal deficits. This means that the market will rely more on real-time economic data rather than pre-determined interest rate paths from central banks, reducing policy predictability. It also means that asset prices will become increasingly sensitive to inflation, employment, and economic data, and market volatility may refocus during periods of major data releases. On the other hand, Middle East risks have escalated again. Reports of missile attacks on merchant ships in the Strait of Hormuz have surfaced again, threatening to shatter the previously established window of easing tensions between the US and Iran. Trump reiterated that he would not rule out escalating military action if negotiations fail. However, Saudi Arabia lowered its official selling price for crude oil to the Asian market in August, reflecting relatively ample supply. The energy market is currently still oscillating between "geopolitical risks" and "supply easing," and whether oil prices can rebound in the short term depends on whether the conflict further impacts actual supply. On the other hand, the issues of Japanese debt pressure and the continued weakening of the yen have resurfaced, and market doubts about the Bank of Japan's policy space have not subsided. The trend of global capital flowing into high-yield dollar assets has not changed significantly. For the crypto market, what truly deserves attention is not a single event, but the loss of the "certainty" provided by central bank forward guidance. As policy begins to rely entirely on data, geopolitical risks escalate, and global liquidity remains tight, the crypto market will continue to be primarily driven by changes in risk appetite and liquidity momentum in the short term. Price movements will continue to be repeatedly disrupted by macroeconomic events and market sentiment. Until capital flows truly form a unified direction, a cautious stance is expected to persist.
June non-farm payroll data may be cooler, with the market expecting 110,000 new jobs. The Federal Reserve's policy path is under close scrutiny.
According to BlockBeats, the US will release its June non-farm payrolls report at 8:30 PM Beijing time on July 2nd. The market widely expects 110,000 new non-farm jobs in June, lower than May's 172,000; the unemployment rate is expected to remain at 4.3%, with average hourly earnings rising 0.3% month-over-month. The market is focused on two core issues surrounding the June data: first, whether the job market will continue to tighten after May; and second, whether May's strong performance was affected by one-off factors, particularly the short-term labor demand generated by the World Cup. This will directly impact interest rate expectations. The current stabilization of the US job market has reduced the necessity for the Federal Reserve to continue cutting interest rates. Unlike last year's rate cuts, the financial market currently widely expects the Fed to raise rates sometime this year to address inflationary pressures. However, if the job market unexpectedly weakens, this expectation could quickly reverse. If employment data is stronger than expected, the market may further reduce its expectations for interest rate cuts, or even re-priced in the possibility of rate hikes, putting pressure on highly valued assets such as technology stocks. Conversely, if the data is significantly weak, it may boost expectations for rate cuts, but it will also trigger market concerns about the prospects for US economic growth and corporate profits. The market is also paying close attention to the volatility of assets such as the US dollar, US Treasury yields, and the Japanese yen exchange rate.
Warsh declined to comment on whether the Federal Reserve would raise interest rates in July.
Mars Finance reports that on July 1st, Federal Reserve Chairman Warsh avoided questions about the possibility of a rate hike at the Fed's July meeting. "I hope that when we meet in four weeks, we'll have a full 'family debate,'" he said. "When we meet behind closed doors, we'll have a heated debate. But beyond that, I have no further information to share." Warsh made these remarks at the European Central Bank's annual policy symposium in Sintra, Portugal; this was his first public appearance since attending a Fed press conference last month. Since then, investors have begun to anticipate more rate hikes from the Fed, but the market currently estimates less than a 50% chance of a rate hike this month. (Jinshi)
The US Supreme Court affirmed the Federal Reserve's independence, but the ruling may sow the seeds for future legal challenges.
According to Mars Finance, on June 30th, the U.S. Supreme Court ruled that Federal Reserve governors still enjoy the protection of being removed from office "only for justifiable reasons," meaning the president cannot arbitrarily dismiss them, thus maintaining the independence of the Fed's monetary policy. However, the Supreme Court also ruled that the president can dismiss commissioners of other independent regulatory agencies, such as the Federal Trade Commission (FTC), without cause, overturning a long-standing legal precedent applicable to independent agencies and making the Fed almost the only federal agency still enjoying special personnel protections. Columbia Law School professor Kathryn Judge stated that while the Fed's independence has been preserved, its legal basis has been significantly weakened compared to the past few decades, and the rationale for its special treatment will need to be continuously explained to the public. Former Vice Chairman for Supervision of the Federal Reserve, Randal Quarles, previously pointed out that retaining special personnel protections only for the Fed presents a legal inconsistency and may face new judicial challenges in the future. He believes that why the Fed is an exception when the courts have determined that most independent regulatory agency officials belong to the executive branch and can be dismissed by the president remains a legal question that needs further clarification.
After his pressure on the Federal Reserve faltered, Trump turned to gas stations, urging oil companies to lower gasoline prices to $2.50 per gallon.
According to BlockBeats, on June 30th, after failing to pressure the Federal Reserve, Trump turned his attention to gasoline retailers in his inflation war. In a post on Truth Social, he stated that crude oil prices had fallen to $68 per barrel and continued to decline, demanding that gas stations immediately lower their prices. He bluntly stated that if prices didn't drop, "big problems await," and even called for prices to be reduced to $2.50 per gallon. According to AAA data, the current average price of regular gasoline is $3.85 per gallon, down from $4.36 a month ago, but still higher than $3.19 a year ago. Data shows that as of May, the US inflation rate was 4.2%, far exceeding the Federal Reserve's 2% target. Gasoline prices have risen by 40.5% over the past 12 months, and fuel prices have increased by 58.9%, mainly due to the conflict between the US and Israel and Iran, which temporarily disrupted Middle Eastern oil supply routes. Previously, Trump had been pressuring former Federal Reserve Chairman Jerome Powell and Governor Lisa Cook to cut interest rates, but new Chairman Walsh did not cut rates at his first policy meeting. Notably, on Monday, the Supreme Court ruled 5-4 that Trump's attempt to remove Cook from office was illegal due process, further solidifying the Fed's independence and seen as another blow to the White House's efforts to intervene in market prices.
Swiss private bank Julius Baer: The Federal Reserve is unlikely to raise interest rates, and gold prices are expected to rebound.
According to Mars Finance, citing Jinshi, Swiss private bank Julius Baer predicts that the Federal Reserve is unlikely to raise interest rates and the dollar may weaken, thus gold prices are expected to recover lost ground.