Core Viewpoint - Federal Reserve Chairman Jerome Powell did not indicate any imminent interest rate cuts during his testimony, emphasizing a cautious approach to policy adjustments despite pressure from President Trump and other officials [1][4]. Group 1: Interest Rate Policy - Powell reiterated that the Fed does not need to rush into policy changes, citing the strength of the economy as a reason to wait for clearer insights into the impact of tariffs before making decisions [1][2]. - The Fed maintained interest rates in the range of 4.25%-4.5% for the fourth consecutive meeting, reflecting a cautious stance amid economic uncertainties [1][3]. - Market expectations have shifted slightly, with traders increasing bets on at least two rate cuts by the end of the year following Powell's comments [2][3]. Group 2: Tariff Impact on Inflation - Powell acknowledged that tariffs could lead to upward pressure on inflation and weaken economic growth, although the exact impact remains uncertain [1][2]. - He indicated that the effects of tariffs on inflation could be either temporary or more persistent, depending on various factors [5][6]. - The Fed's decision-making will be influenced by how quickly tariff effects are transmitted to prices and whether long-term inflation expectations remain anchored [6]. Group 3: Economic Outlook - Powell described the overall economy and labor market as solid, with inflation having significantly decreased from mid-2022 highs but still slightly above the Fed's 2% target [6]. - He emphasized the need for vigilance against potential large-scale and sustained inflation shocks, indicating that the Fed has not fully restored price stability [6].

Core Viewpoint - The May PPI data in the U.S. showed a mild impact from costs of goods and services, with core PPI figures falling short of expectations, indicating potential price pressures in the second half of the year due to high tariffs and corporate profit margin concerns [1] Group 1: PPI Data Insights - The May PPI data revealed an expansion in profit margins for wholesalers and retailers, particularly in the automotive and machinery sectors, following a decline in April [1] - Year-to-date profit margins have shown fluctuations, highlighting the uncertainty of trade policies on prices and demand [1] Group 2: Economic Indicators - Analysts are closely monitoring the PPI report as certain components are used to calculate the Fed's preferred inflation measure, the PCE data [1] - Areas of weakness in May included declines in airfare prices, investment management fees, and moderate healthcare costs [1] - The PCE report is expected to be released later this month, which will provide further insights into inflation trends [1]

Core Viewpoint - The decline of the US dollar is linked to the absence of tariff effects and the recent lower-than-expected inflation data, which has prompted President Trump to call for interest rate cuts [1] Group 1 - The US dollar continues to be under pressure following the release of disappointing inflation data [1] - President Trump has criticized Federal Reserve Chairman Jerome Powell for being "too late" in implementing interest rate cuts [1] - Thu Lan Nguyen, head of foreign exchange and commodity research at Deutsche Bank, suggests that the dollar's decline may reflect a lack of tariff effects in the data, supporting Trump's viewpoint [1]