Group 1 - President Trump signed an executive order to dismiss Federal Reserve Governor Lisa Cook, causing a decline in the US dollar and a significant rise in non-US currencies against the dollar [1][2] - Gold prices surged, reaching a two-week high, with spot gold hitting $3,386 per ounce, the highest level since August 11 [1] - Cook's dismissal marks an unprecedented action as she was the first African American woman to serve on the Federal Reserve Board, with Trump citing alleged misconduct in her mortgage dealings [1][2] Group 2 - The accusation against Cook involves declaring two properties as "primary residences," which could allow for lower mortgage rates, aligning with the Trump administration's recent opposition to diversity, equity, and inclusion (DEI) initiatives [2] - Trump's actions indicate an escalation in his efforts to reshape the leadership of the Federal Reserve, as he has previously pressured the Fed to lower interest rates, which officials have resisted due to inflation concerns [2] - Market expectations for a 25 basis point rate cut by the Federal Reserve on September 17 are currently at 83%, with attention turning to the upcoming core PCE price index for further insights on the interest rate path [2]

Group 1 - The Federal Reserve's potential interest rate cuts in 2025 are more likely to be driven by inflation rather than unemployment rates, as the labor market may not directly lead to rising unemployment due to immigration policies affecting labor growth [2][3] - The U.S. economy is expected to enter the second half of 2025 on an unstable foundation, with the first quarter's GDP contraction exceeding initial estimates and a low-quality rebound in the second quarter influenced by reduced trade deficits and cautious consumer and business spending [2][3] - The upcoming U.S. core PCE price index is viewed as a critical reference for the Federal Reserve's interest rate decisions, with weak performance potentially reinforcing a dovish stance and increasing downward pressure on the dollar [1][2] Group 2 - If the U.S. adopts more closed trade policies, the Eurozone could become the largest economy outside the U.S., attracting more investment interest towards the Euro [2] - Geopolitical tensions easing have nearly completely offset the temporary support the dollar received as a safe-haven asset, while the Euro is expected to benefit from ongoing pessimism surrounding the dollar [2] - Despite $250 billion to $300 billion in tariff revenues, the rising debt levels in the U.S. are unlikely to be alleviated in the short term, as the government is not expected to implement significant tax increases or spending cuts [3]

Core Insights - The U.S. core PCE price index for March recorded an annual rate of 2.6%, marking the lowest level since June 2024, aligning with expectations [1] - The month-over-month core PCE price index for March showed a rate of 0%, the lowest since April 2020, falling short of the expected 0.1% [1]