Core Viewpoint - The ongoing financial turmoil, ignited by a fierce battle between the White House and the Federal Reserve over interest rate cuts, signals a potential decline in the dominance of the US dollar [3][5][8]. Group 1: Financial Market Reactions - Following President Trump's call for an immediate 300 basis point rate cut, market reactions were swift, with the probability of Powell's dismissal rising from 16% to 26% within hours, gold prices increasing by $20 per ounce, and the dollar index dropping by 25 points [3]. - The Federal Reserve's decision to maintain interest rates at 4.25%-4.5% was marked by a historic 9-2 vote, indicating significant internal divisions, the first dual dissent since 1993 [6]. - The Nasdaq index reached a historical high, contrasting with a nearly 1% decline in the Dow Jones, driven by strong performances from tech giants like Nvidia, which saw its market cap exceed $4.3 trillion [6]. Group 2: Central Bank Actions and Global Trends - In April, global central banks sold $36 billion in US Treasuries, while purchasing 280 tons of gold in the first half of the year, the highest in two decades, reflecting a significant loss of confidence in the dollar [8]. - The share of US dollar reserves held by global central banks fell from 72% to 58%, while the ASEAN's renminbi settlement rate surged to 38%, indicating a shift towards de-dollarization [8]. - The European Union and ASEAN are reportedly constructing a "de-dollar trade network," further shaking market confidence in the dollar's supremacy [8].

Group 1: Market Dynamics - The Dow Jones Industrial Average fell nearly 1%, while the Nasdaq Composite Index reached a historic high, indicating a stark contrast between tech giants' performance and traditional markets [2] - Nvidia's stock surged by 1.87%, pushing its market capitalization above $4.3 trillion, attributed to its deployment of 600,000 to 800,000 revolutionary SOCAMM memory modules for next-generation AI chips [2] - The Chicago Mercantile Exchange's interest rate futures market shows a 62.6% bet on a rate cut in September, despite a 97.4% probability of no change in July [2] Group 2: Global Economic Tensions - The U.S. government's imposition of a 19% tariff on Indonesian products and escalating trade tensions with Mexico contribute to global economic uncertainty [3] - A new agreement between the U.S. and EU sets the tariff on EU goods at 15%, significantly lower than the previously threatened 60%, with the EU committing to purchase $750 billion in U.S. energy products [3] - Central banks sold $36 billion in U.S. Treasury bonds in April and hoarded 280 tons of gold in the first half of the year, marking the highest level in two decades [3] Group 3: Inflation and Economic Signals - The core Consumer Price Index (CPI) rose by 2.9% year-on-year in June, exceeding the Federal Reserve's 2% target, with nearly 90% of businesses indicating they would pass tariff costs onto consumers [5] - The 30-year U.S. Treasury yield surpassed 5%, while domestic demand growth hit a two-and-a-half-year low, indicating a slowdown in hiring [5] - The U.S. national debt stands at $37 trillion, with interest payments projected to exceed $1 trillion by 2025, consuming a quarter of federal tax revenue [5] Group 4: Federal Reserve's Internal Struggles - The Federal Reserve is experiencing significant internal division, with a 9-2 vote to maintain interest rates, marking the first public dissent among board members in over 30 years [6] - Calls for an immediate 25 basis point rate cut were made by board member Waller, while Bowman and others opposed any easing of monetary policy until inflation is controlled [6] - Powell emphasized that controlling inflation remains the primary goal, despite external pressures from the Trump administration [6] Group 5: Political Pressures on Monetary Policy - President Trump has publicly demanded a 300 basis point rate cut and hinted at the potential dismissal of Fed Chair Powell, causing market volatility [7] - Following Trump's threats, the probability of Powell's dismissal surged to 26%, leading to a spike in gold prices and a drop in the dollar index [7] - Trump's subsequent reversal on the threat of firing Powell and his attempts to negotiate for rate cuts reflect the ongoing tension between the White House and the Federal Reserve [7]