Trump’s fight with the Fed is veering into absurdity ...Middle East

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The President has gone full-out in a war against Federal Reserve Chairman Jerome Powell in an arm-twisting effort to get him to lower interest rates. He's also sure to nominate a dove to replace him next May.

The best case for cutting rates is that the employment market is turning. There is some evidence of that with continuing jobless claims at the highest since 2021 but at the same time initial jobless claims have slid for three straight weeks after a scare in early June.

Zooming out to the non-farm payrolls report, it surprised markets in June with a +139K and the trend is relatively stable.

There is also the huge budget package that Trump and Republicans just passed. It solidifies lower corporate tax rates and allows for accelerated depreciation of investment, something that should lead to business investment and hiring -- and even a potential boom. In addition, other moves on the tax side like 'no tax on tips' could put more money in consumers' pockets.

Finally, the stock market is at record highs and that should further spur investment, spending and boost consumer confidence.

As it unwinds -- and particularly if Trump relents on the trade war -- then there are reasons to be bullish on the US dollar.

This article was written by Adam Button at www.forexlive.com.

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