The US dollar extends losses since Besent talks about double rate

• Slips in dollars on the increase in feed rate cuts
• Treasury Sec. Besent favors a 50bps reduction
• Yen meets the concerns about Boj’s inflation metric
• and Bitcoin goes up to new records

Besent asks for a double rate cut by the Fed

On Wednesday he continued to lose ground against all his main peers, eroded by increasing bets after the inflation data of the United States for July suggested that the impact of tariffs on consumer prices has been small until now.

Yesterday, the Secretary of the Treasury, Scott Besent, said that a “series of tariff cuts” is justified and that the Fed must resume its flexion policy with a reduction of 50 bp at the September meeting. This adds to the political pressure with which the Fed has to deal with when performing a monetary policy, with investors on the edge of its seats on whether the White House will leave with it.

In addition to Besent’s comments, the White House spokeswoman Leavitt said that President Trump is considering a lawsuit against Fed Powell president in relation to the management of renovations at the headquarters of the Fed.

Fed cutting bets increase before PPI data

With all that in mind, investors now have a more than total price in a 25 -bp rate at the September meeting. Actually, they are assigning a small probability of 7% of a double cut of 50 bp. As for the total number of basic reductions points for this year, it has increased from 60 to 64.

The president of the Fed of Atlanta, Bostic, said yesterday that almost full employment allows the Fed to be patient and does not hurry to make any policy adjustment, while the president of the Fed of Chicago, Goolsbee, said they are trying to understand if the tariffs will feed the temporal or more persistent inflation. Both policy manufacturers are in line with the broadest vision of the Fed that there is no hurry for lower interest rates. But what is not precedents is how market participants are paying more attention to what officials outside the Fed have to say.

Said all that, today, it is likely that dollar merchants pay more attention to the data for July. A deceleration in producer prices could involve greater softness in consumer prices in the coming months and, therefore, harming the US dollar even more, since a reduced third quarter rate rate at the end of the year becomes even more likely.

Is the box behind the curve?

The Treasury Secretary, Besent, not only comments what the Fed should do. He also said that the BOJ has put “behind the curve” by delaying rates increases. Combined with reports that suggest that some Boj members are pressing to drop a vaguely defined inflation metric, Besent’s comments gave the Yen in the arm a chance.

The governor of Boj, Ueda, has been in favor of going slowly in the rates increases due to the underlying inflation that remains below the goal of the bank of 2%. However, there is not a single metric that measures “underlying inflation.” Both rates and rates have been exceeding 2% for years and, therefore, opposite voices have become stronger, saying that the Boj depends too much on a dark reading to guide politics. According to the Japan OIS market, the probability of an increase of 25 bp by the end of the year has increased to 65%.

Wall Street and Bitcoin stretch their manifestations

In Wall Street, both the S&P 500 and the NASDAQ reached new records for the second consecutive day, driven by the hope that the Fed needs to reduce interest rates faster and deeper than previously thought. Although the futures of shares have fallen today, a set of soft PPI readings could encourage investors to increase their exposure to risk and point to an unexplored territory again.

Bitcoin also pushed a new record amid the weakness in the dollar. The main cryptocurrency of the world has already been promoted by the increase in institutional interest at the root of critical regulatory changes, and the last movement is Trump’s executive order to allow cryptographic assets in retirement plans.