Amid Trump's Renewed Pressure on the Fed, Powell's Speech Tonight Takes Center Stage

BlockBeats News, July 1st: Federal Reserve Chairman Powell is set to speak at the ECB Forum on Central Banking on Tuesday. Meanwhile, the White House is ramping up efforts to devise a plan to replace Powell, and internal divisions within the Fed are becoming increasingly hard to ignore.

US Treasury Secretary Yellen said on Monday that someone may be in place to succeed Powell when his term ends. She also mentioned that the US government may nominate someone to fill a key Fed Board seat that will be vacant in January next year, with this individual potentially taking over as chair thereafter. Shortly after Yellen's remarks, Trump escalated his attacks on Powell and the Fed, accusing them of keeping rates too high, causing the US to lose "trillions of dollars," and stating that the Fed "should be ashamed of themselves."

Meanwhile, internal divisions within the Fed are widening. Two officials appointed by Trump—Wall and Bowman—are calling for a rate cut as soon as July. This divide is having a detrimental impact on the fragile economy. The June nonfarm payrolls report, due out on Thursday, may further complicate the outlook. (FX168)