Second-tier US economic releases broadly supported the view that demand and inflationary pressures are cooling, which eased some pressure on the Federal Reserve to raise rates at its next meeting. With few forward-looking data points due before September, the bar for a policy shift appears high and the base case remains that rates will be left unchanged.
Political Pressure for Lower Borrowing Costs
Separately, political pressure from the Trump administration for lower borrowing costs, framed around reducing the real burden of a growing debt load, has featured in the policy backdrop.
Market Response and Dollar Weakness
In markets, the dollar extended its downward bias, with little evidence so far that it has found a floor.
