Core Points - Newly-confirmed Federal Reserve Governor Stephen Miran dissented from the decision to lower the federal funds rate by a quarter percentage point, advocating instead for a half-point cut [1][2] - Miran was the sole dissenter in the Federal Open Market Committee's statement, indicating a divergence in monetary policy perspectives among the governors [2] Group 1 - Stephen Miran's confirmation by the Senate to the Fed Board of Governors occurred on Monday, highlighting the political dynamics surrounding his appointment [2] - The Senate Banking Committee's examination of Miran's appointment reflects the balance Republican senators must maintain between supporting an independent central bank and loyalty to party leadership [1] - Governors Michelle Bowman and Christopher Waller, who previously dissented in favor of a quarter-point move, aligned with Fed Chair Jerome Powell and others, showcasing a shift in consensus among the Fed governors [2]

Group 1 - The dollar index rose by +0.03% due to increased safe-haven demand from geopolitical risks in Europe, particularly after Poland shot down Russian drones [1] - The dollar's gains were limited as bond yields declined following a weaker-than-expected US August PPI report, which solidified expectations for a 25 basis point rate cut by the Fed at the upcoming FOMC meeting [1][4] - The US final-demand August PPI eased to +2.6% year-on-year from +3.1% year-on-year in July, which was below expectations of +3.3% year-on-year [3] Group 2 - Markets are currently pricing in a 100% chance of a 25 basis point rate cut and a 12% chance of a 50 basis point rate cut at the upcoming FOMC meeting on September 16-17 [4] - Following the anticipated 25 basis point rate cut at the September meeting, markets are discounting a 79% chance of a second 25 basis point cut at the October 28-29 meeting [4] - Overall, markets are pricing in a total reduction of 74 basis points in the federal funds rate by year-end, bringing it down to 3.64% from the current 4.38% [4] Group 3 - The EUR/USD fell by -0.09% due to escalating geopolitical risks in Europe, particularly after Poland's actions against Russian drones [5] - The euro is under pressure as geopolitical tensions rise, with long liquidation and position squaring affecting the currency ahead of the ECB meeting [5] - Losses in the euro were somewhat mitigated after the dollar slipped following the weaker-than-expected US August PPI report [5]