Group 1 - President Trump is expected to nominate a candidate for the upcoming vacancy on the Federal Reserve Board, narrowing down potential successors to four individuals [1] - The resignation of Fed Governor Adriana Kugler creates an opportunity for Trump to appoint a preferred candidate, which may lead to a more dovish Fed chair [1] - Market expectations for a Fed rate cut in September have increased significantly, putting pressure on the US dollar index, which is hovering around the 98 mark [1] Group 2 - Three main candidates for the next Fed chair are emerging: Kevin Warsh, Kevin Hassett, and Christopher J. Waller, all of whom are inclined to support rate cuts [2] - If the US adopts a significantly accommodative fiscal and monetary policy, it may lead to a scenario of re-inflation, impacting the dollar's purchasing power and exacerbating "de-dollarization" trends [2] - Concerns about the quality and credibility of US economic data, along with political pressures on Fed independence, are contributing to the risk of a weaker dollar [2] Group 3 - The long-term outlook for the dollar is still heavily influenced by US economic fundamentals, with upcoming inflation data expected to provide short-term support for the dollar index [3] - The change in Fed chair may have a more short-term impact on market sentiment, while core drivers of the dollar index remain tied to economic performance [3]

Inflation Trends - US inflation rebounded slightly in June, with CPI rising from 2.4% to 2.7% year-on-year[1] - Core CPI increased from 2.8% to 2.9% year-on-year, while month-on-month growth rose from 0.13% to 0.23%[6] - Food prices maintained a month-on-month growth of 0.3%, while energy prices rebounded from -1% to 0.9%[6] Market Expectations - Market expectations for interest rate cuts have slightly decreased, with the probability of no change in July rising to 96%[1] - The anticipated rate cut for the year has decreased from 48 basis points (bp) to 44 bp[1] - The Federal Reserve is expected to maintain rates in July, with potential cuts in September and either October or December[7] Employment and Demand - The job market shows signs of weakening demand, influenced by seasonal hiring patterns[1] - New and used car prices have declined, indicating reduced consumer demand[6] - Core service prices have shown a slight rebound, particularly in healthcare and leisure services, influenced by immigration policies[6] Future Projections - Inflation is expected to see a slight rebound in Q3 before gradually declining[1] - The CPI month-on-month growth is projected to peak around 0.4% in August-September[7] - The impact of tariffs on inflation is anticipated to become more pronounced, particularly in core goods[6]