Source: ChannelNewsAsia
Brain - Fed chief likely to focus on trade-inspired policy shift in testimony
Key Highlights

But the U.S. central bank is now laying the groundwork for its first policy shift triggered by tweets

But Trump's statements spooked financial markets so decisively

With investors in contracts linked to the Fed's targeted overnight lending rate putting the probability of a rate reduction at close to 100 percent, "it would be unprecedented for the Fed to not cut," Lavorgna wrote

Earlier rounds of U.S. tariffs on trading partners including China had been dismissed as of little macroeconomic importance

Though the threatened tariffs on Mexico never materialized and China and the United States have agreed to resume talks to reach a trade deal, that "did little to alleviate the uncertainty that Fed officials believe is contributing to cooling momentum in global trade and domestic capex plans," Deutsche Bank's U.S. economics team wrote this week

Channel NewsAsia