Core Viewpoint - The selection of the next Federal Reserve Chair is highly anticipated, especially given President Trump's ongoing pressure on the Fed and his attempts to place loyalists within the institution, which raises concerns about the Fed's policy independence [1][2]. Candidate Summary - The shortlist for the next Federal Reserve Chair includes current Fed governors Christopher Waller and Michelle Bowman, former Fed governor Kevin Warsh, White House National Economic Council Director Kevin Hassett, and Rick Rieder, Chief Investment Officer of Fixed Income at BlackRock [1]. - Treasury Secretary Mnuchin plans to submit a candidate list to President Trump after the Thanksgiving holiday, with Trump expected to make a decision by the end of the year [1]. Market Concerns - Trump's continuous criticism of Powell and the Fed's monetary policy is perceived as undermining the Fed's independence, with concerns that his appointed candidate may lack independence [2]. - The market anticipates a 25 basis point rate cut at the upcoming October monetary policy meeting, influenced by the potential new chair's stance on monetary policy [2]. Analysis of Candidates - According to CITIC Securities, the main competition for the Fed Chair position is between Waller and Hassett, with market sentiment favoring Waller due to concerns over Hassett's loyalty to Trump [3]. - The market is wary of Hassett's potential appointment due to previous resistance faced by Trump's nominee Stephen Moore, suggesting that Waller may ultimately be the favored candidate [3]. - If Waller is appointed, it could lead to a reversal in market expectations regarding the Fed's independence, positively impacting overall dollar assets and negatively affecting gold prices [3].

Group 1 - The new Federal Reserve Governor, Milan, emphasizes the independence of monetary policy and bases decisions on objective economic data, advocating for a 50 basis point rate cut, which he was the only member to support [1][3] - Milan predicts that interest rates need to be lowered by more than 100 basis points by the end of the year, arguing that current rates are significantly above the neutral rate and that strict immigration policies will reduce housing demand and inflationary pressures [2][3] - Milan's stance on aggressive rate cuts may lead to market volatility, as he warns that prolonged deviation from the neutral rate could threaten employment targets [2][3] Group 2 - Milan's communication with Trump was limited to congratulations, with no discussion of voting intentions, reinforcing his commitment to independent economic data interpretation and alleviating concerns about political interference [4] - Minneapolis Fed President Kashkari supports the current rate cut decisions, citing low risks of inflation from tariffs and viewing Milan's appointment as a routine personnel change, indicating continued public trust in the Fed's independence [5] - Milan's aggressive rate cut proposals could exert 5%-8% downward pressure on the dollar index in the short term, contradicting traditional views that high rates support the dollar, and potentially accelerating capital outflows to emerging markets [6]

Core Viewpoint - The Federal Reserve's upcoming meeting on September 16-17 is highly anticipated, with expectations of a 25 basis point rate cut, indicating a potential shift towards a more accommodative monetary policy [1][3][6]. Group 1: Monetary Policy Expectations - The market widely anticipates a 25 basis point rate cut during the meeting, reflecting investor sentiment that the Fed is prioritizing labor market performance over inflation concerns [3][6]. - There is a nearly 70% probability of two additional rate cuts by the end of the year, suggesting an acceleration of the easing cycle and a potential rebound in risk sentiment [3][6]. Group 2: Key Focus Areas of the Meeting - The meeting will focus on whether the Fed's monetary policy is at a turning point, with a rate cut potentially signaling the start of a new easing cycle amid slowing job growth and persistent inflation above target [6]. - The independence of the Fed's policy is under scrutiny, particularly in light of ongoing political pressures and controversies surrounding board nominations, raising questions about Powell's ability to make independent decisions [6]. - The newly released economic projections (SEP) and the dot plot will be closely watched, especially regarding expectations for terminal interest rates before 2026, which could influence global asset allocation and market confidence [6]. - Powell's press conference will be crucial, as his comments on inflation, employment, and policy direction, along with responses to political pressures, may significantly impact market expectations [6].

Group 1 - The long-term value support for gold remains due to the continuous decline of the "U.S. dollar credit system," which has been reinforced by recent events [3] - The recent dismissal of Federal Reserve Governor Lisa Cook by Trump marks the first time in 112 years that a governor has been removed, raising concerns about the political norms and constitutional order [3] - Trump's team has drafted a secret plan to enhance White House intervention in the Federal Reserve, potentially undermining the Fed's policy independence [4] Group 2 - The resignation of Cook provides Trump with the opportunity to nominate a third Federal Reserve governor, which could lead to a majority that aligns with his stance, fundamentally affecting future monetary policy [4] - Gold pricing reflects the opportunity cost of interest-bearing assets, with its performance being influenced by the Fed's interest rate cycle and the global economic cycle [4] - In periods of recession or stagflation, gold tends to perform better as a safe-haven asset compared to cash, highlighting its value during economic downturns [4] Group 3 - Recently, gold has broken through previous resistance levels, indicating market confidence in its value [6] - Investors are encouraged to pay attention to gold ETFs as a potential investment opportunity [6]

Group 1 - The Australian dollar (AUD) is currently trading around 0.65 against the US dollar (USD), with a slight decline of 0.13% from the previous close of 0.6553 [1] - Australia's Q2 real spending growth was 0.2%, recovering from a previous value of -0.1%, but still below market expectations of 0.7%, indicating insufficient consumer recovery [1] - Higher-than-expected inflation data in Australia, with the July Consumer Price Index (CPI) rising 2.8% year-on-year, has strengthened the AUD's resilience against declines [1] Group 2 - Technical analysis indicates that the AUD/USD is slightly above an upward trend line, suggesting a bullish market sentiment [2] - The AUD/USD is trading above the 9-day Exponential Moving Average (EMA), indicating a gradual increase in short-term price momentum [2] - The AUD/USD may test the monthly high of 0.6568 from August 14, and if this level is broken, it could target the nine-month high of 0.6625 recorded on July 24, reinforcing a bullish structure [2]

Group 1 - Trump announced a significant reduction in drug prices, claiming a potential decrease of 1400% to 1500%, and plans to impose higher tariffs on imported drugs, indicating a strong stance on pharmaceutical pricing [1] - Major pharmaceutical companies, including Eli Lilly, Novo Nordisk, and Pfizer, received letters from Trump urging them to lower drug prices within 60 days, with threats of using all means to protect American families from drug pricing abuses [1] - The proposed tariffs on imported drugs could reach as high as 250%, marking the most severe plan to date, aimed at encouraging pharmaceutical manufacturers to bring production back to the U.S. [1] Group 2 - Industry experts expressed concerns that the proposed tariffs could increase costs, disrupt the drug supply chain, and pose risks to patients, with the Pharmaceutical Research and Manufacturers of America (PhRMA) stating that drugs have historically been exempt from tariffs due to cost implications [2] - Trump's dismissal of Federal Reserve Governor Lisa Cook is seen as an escalation of his attacks on the central bank, with implications for future monetary policy and potential shifts towards more dovish members [3][4] - Powell's recent remarks at the Jackson Hole conference suggested a potential for interest rate cuts in September, indicating a shift in monetary policy that could be influenced by the ongoing power struggle within the Federal Reserve [4]

Market Overview - On August 20, US tech stocks experienced a significant decline, with the Nasdaq Composite Index dropping nearly 2% and falling below 21,000 points for the first time since August 7 [1] - The Philadelphia Semiconductor Index plummeted over 3%, with Nvidia seeing a drop of nearly 4% [1] - The VIX, known as the "fear index," surged over 10% during this period [1] Major Tech Stocks Performance - Major tech stocks saw widespread losses, with Apple down 1.54%, Tesla down 2.68%, Amazon down 1.97%, Facebook down 1.24%, Google down 1.16%, Nvidia down 1.54%, and Microsoft down 0.77% [3][4] - The Philadelphia Semiconductor Index fell by 1.79%, with Intel dropping over 6% and Micron Technology down over 5% [4] Options Market Activity - Wall Street traders are increasingly purchasing put options to hedge against the risk of further declines in tech stocks, particularly those tracking the Nasdaq 100 Index [12] - The cost of hedging against significant declines is nearing a three-year high, indicating heightened concern among traders [12] Economic Indicators and Federal Reserve Outlook - The US dollar index weakened, reported at 98.173, down 0.11% [8][9] - Market expectations suggest that the Federal Reserve may lower interest rates by 25 basis points in September, with a 51.5% probability of another cut in October [16] - Concerns about the independence of the Federal Reserve and its ability to manage inflation effectively are rising, particularly in light of political pressures [19]

Group 1 - The Federal Reserve officials are experiencing rare divisions regarding the timing and extent of interest rate cuts, with two dissenting votes during the July meeting signaling potential market concerns [1] - The Federal Open Market Committee decided to maintain the key interest rate at a target range of 4.25%-4.5%, despite dissent from two members who advocated for a 25 basis point cut [1] - The upcoming release of the July meeting minutes is expected to reveal the depth of internal divisions within the Federal Reserve, particularly regarding dovish and hawkish stances on inflation [1] Group 2 - Continuous pressure from the Trump administration for interest rate cuts is raising concerns about the independence of economic policy decisions, as political influences may be affecting the Federal Reserve's actions [2] - The Federal Reserve officials have historically avoided political commentary, but the ongoing competition for the Fed Chair position complicates their ability to maintain this neutrality [2] - Investors are likely to scrutinize the meeting minutes for indications of political interference that could undermine the Federal Reserve's policy independence [2]

Group 1 - The core viewpoint of the news is that President Trump is expected to announce a new Federal Reserve Chair soon, with a narrowed selection of candidates, indicating dissatisfaction with current Chair Powell's interest rate policies [2][3][4] - Trump has mentioned that the candidates for the Federal Reserve Chair include two individuals named Kevin, specifically Kevin Hassett and Kevin Warsh, along with two others, one of whom is speculated to be current Fed Governor Christopher Waller [3][4] - Both Kevin candidates advocate for lower interest rates, which aligns with Trump's stance, and market predictions have shifted to reflect a 35% chance for each of them to be appointed as the next Fed Chair [4][5] Group 2 - The resignation of Fed Governor Adriana Kugler provides Trump an opportunity to appoint a pro-rate cut official without waiting for her term to end, potentially influencing the timeline for selecting the next Fed Chair [6][7] - The unexpected resignation of Kugler may lead to a restructuring of the Fed leadership sooner than anticipated, which could impact the independence of the Fed and its policy decisions [7][8] - Despite the recent disappointing employment data, which has led to increased market expectations for a rate cut in September, Fed officials maintain that the labor market remains healthy, indicating a cautious approach to monetary policy [8][9]

Core Viewpoint - The Federal Reserve decided to maintain the federal funds rate target range at 4.25% to 4.50%, marking the fifth consecutive meeting without a rate change, aligning with market expectations [1] Group 1: Federal Reserve's Decision and Internal Disagreements - The decision reflects a significant internal division within the Federal Reserve, with 9 out of 12 voting members supporting the decision to keep rates unchanged, while two members advocated for a 25 basis point cut [1] - This marks the first time in over 30 years that two Federal Reserve governors have publicly expressed differing opinions on interest rate decisions, indicating deep-seated divisions in monetary policy [1] - Chairman Powell acknowledged these divisions but emphasized that the majority believes inflation remains slightly above the 2% target and that the current policy rate is in a "moderately restrictive" range [1] Group 2: Market Reactions and Political Pressures - Financial markets experienced notable volatility following Powell's remarks, with the Dow Jones Industrial Average falling by 171.71 points, while the Nasdaq Composite Index rose by 31.38 points [2] - Political pressure is increasing, with President Trump publicly calling for immediate rate cuts and suggesting that a reduction to 1% could save the government significant debt costs [2] - Powell reiterated the importance of basing monetary policy adjustments on solid economic and inflation data, underscoring the need to respect the independence of the central bank [2] Group 3: Future Policy Outlook and Economic Indicators - Powell's statements indicate a hawkish stance, with no signals for a rate cut in September, emphasizing that the current rate is only "moderately restrictive" and that the labor market remains strong [3] - The probability of a 25 basis point rate cut in September dropped from 68% to 45%, while the likelihood of maintaining the current rate increased to 55% following Powell's comments [3] - The impact of tariffs on inflation remains a critical factor for future policy decisions, with Powell noting that the transmission of tariff costs is still in its early stages and that the overall impact is yet to be fully assessed [4] Group 4: Tariff Implications and Trade Negotiations - Market participants warn that U.S. importers' buffer inventories are depleting, which may enhance the motivation to pass on tariff costs [4] - Powell highlighted that while many U.S. companies intend to pass on cost pressures to consumers, competitive market conditions limit their actual ability to do so [4] - Recent signs of easing tensions in U.S.-Japan and U.S.-Europe trade negotiations could potentially reduce inflationary pressures, providing the Federal Reserve with more flexibility in policy responses [4] Group 5: Key Economic Reports Ahead - The upcoming employment reports and inflation data before the September meeting are expected to be crucial in breaking the current policy deadlock [5] - The Federal Reserve's ability to balance its policy independence with the need to respond to current economic realities will be a significant test of its policy acumen [5]