The Federal Reserve
Federal Reserve officials, including Collins, Miran, and Waller, are signaling a growing concern over the labor market, with multiple comments indicating that “downside risks have risen” and the job market has “clearly weakened”, albeit they also acknowledge the sticky inflation from tariffs. Reflecting this pessimistic outlook, they remain lean toward further monetary policy, with both FED collins and Miran suggesting that having “one or two more interest rate cuts this year would be appropriate.” These concerns are compounded by weak consumer sentiment and Waller’s expectation of more layoffs due to AI.
Combined with the FED chair Jerome Powell’s speech on Tuesday, warning on the weakening in labor market conditions, the market now is still priced in for two rate cuts with chances of more than 90% each time.
The US-China Trade
Despite President Donald Trump’s talk of having a trade war with China, US Treasury Secretary Scott Bessent also proposed a clear path to de-escalation, saying that the US could extend the pause on import duties past the November deadline (longer than three months), only if China suspends the new export controls on rare-earth elements.
This could be seen as a strategic move to stack up bargaining chips before the expected leader’s meeting, with Besent warning that the US and its allies are prepared to deliver a coordinated group response to China’s global supply chain management.
India over Russian oil
President Donald Trump claims that Indian Prime Minister Narendra Modi has pledged to stop purchasing Russian oil—a “big step” that follows US pressure and tariffs aimed at cutting off Moscow’s energy revenues amid the Ukraine conflict.
He also said he would pressure China to make a similar commitment, as both India and China are currently the top buyers of Russian oil. The US President also acknowledged that India’s halt would be a gradual “process,” though the Indian Embassy in Washington has not yet confirmed Modi’s alleged commitment.
