Key Takeaways
- Former President Donald Trump has escalated his criticism of Federal Reserve Chair Jerome Powell, demanding immediate interest rate cuts and threatening a lawsuit over the management and construction of Fed buildings.
- Global bond markets are experiencing significant losses, with the UK 30-Year Gilt yield rising by 9 basis points to 5.48%, and US Treasury 10-year and 30-year yields climbing to session highs.
- Despite bond market weakness, major US equity indices opened positively, with the S&P 500 (SPX) up 0.49%, the Dow Jones Industrial Average (DJIA) gaining 0.48%, and the NASDAQ Composite (IXIC) increasing by 0.59%.
- Inflationary pressures persist, with the headline Consumer Price Index (CPI) rising 0.20% in July, maintaining a 12-month change of 2.7%, while US auto insurance rates have surged 94% over the past decade.
Former President Donald Trump has intensified his public pressure on Federal Reserve Chair Jerome Powell, asserting that Powell "must NOW lower the rate." In a series of posts, Trump referred to Powell as "Jerome 'Too Late' Powell" and indicated he is considering a major lawsuit against the Fed Chair, specifically citing concerns over the construction and management of Fed buildings. Trump also criticized former Treasury Secretary Steve Mnuchin for his role in Powell's appointment, claiming the "damage he has done by always being Too Late is incalculable."
The bond market is facing headwinds, as UK and Euro bonds continue to lose value. The 30-Year Gilt yield notably increased by 9 basis points, reaching 5.48%. Concurrently, US Treasury 10-year and 30-year yields have also climbed to session highs, reflecting broader bond market weakness. These movements suggest ongoing concerns about inflation and the trajectory of interest rates.
Despite the downturn in bond markets, US equities opened on a positive note. The S&P 500 (SPX) rose by 30.97 points, or 0.49 percent, to 6,404.42 after the market open. The Dow Jones Industrial Average (DJIA) saw a gain of 211.83 points, or 0.48 percent, reaching 44,186.92. Similarly, the NASDAQ Composite (IXIC) increased by 126.83 points, or 0.59 percent, to 21,512.24.
Inflation remains a key economic factor, with the headline Consumer Price Index (CPI) showing a 0.20% increase in July, holding the 12-month change at 2.7%. The annualized rates for the past three and six months were 2.3% and 1.9%, respectively. A notable area of inflation is US auto insurance rates, which have surged by 94% over the last decade, a rate nearly three times faster than the overall CPI increase of 35% during the same period.
In other news, Turkish President Erdoğan confirmed to Ukrainian President Zelenskyy that forming working groups in military, humanitarian, and political fields could facilitate a meeting with Russian President Putin. The Iranian Defense Minister stated that Iran is closely monitoring "enemy's" movements and is prepared for any new "adventure." Meanwhile, the EU's Foreign Policy Chief emphasized that Israel must approve all international NGO aid shipments and allow humanitarian groups to operate, warning that new restrictions will worsen the humanitarian crisis in Gaza. Former President Trump also weighed in on agricultural markets, proclaiming on Truth Social that China should quadruple its soybean imports from the US, leading to a surge in soybean prices.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.