Key Takeaways
- US Commerce Secretary Howard Lutnick has publicly called for Federal Reserve Chair Jerome Powell's resignation, asserting that interest rates "must come down" and accusing Powell of a "terrible job."
- Reserve Bank of New Zealand (RBNZ) Chief Economist Paul Conway indicated that New Zealand's economic growth softened in the June quarter, with further rate cuts possible if inflation continues to ease. Conway also highlighted that tariff uncertainty is likely to weigh on New Zealand investment and inflation.
- A warning has been issued that tariffs on Japan could surge back to 25% if former President Trump is not satisfied, signaling potential trade policy shifts.
- TD Bank (TD) has mandated a four-day office return for its employees, reflecting a shift in corporate work policies.
US Monetary Policy Under Fire
In a fiery interview, US Commerce Secretary Howard Lutnick launched a scathing critique of Federal Reserve Chair Jerome Powell, demanding his resignation. Lutnick asserted that interest rates "must come down", accusing Powell of doing a "terrible job" and urging that he "should resign or be replaced." These comments underscore growing political pressure on the Federal Reserve to ease monetary policy.
New Zealand's Economic Headwinds and RBNZ Outlook
Reserve Bank of New Zealand (RBNZ) Chief Economist Paul Conway provided an update on the nation's economic health, noting that preliminary data indicates New Zealand's economic growth softened in the June quarter. Conway stated that further rate cuts are possible if inflation keeps easing, with the Q2 CPI data closely aligning with the RBNZ's projections.
Conway also highlighted the significant impact of global trade dynamics, stating that uncertainty over tariffs is likely to reduce business investment and inflation in New Zealand. He emphasized that the full impacts of U.S. tariffs remain unclear, with data under constant review. This uncertainty is seen weakening the global economy and demand, which could further dampen New Zealand's economic prospects.
Global Trade Tensions and Market Movements
Trade policy remains a key concern, with warnings that tariffs on Japan could jump back to 25% if former President Trump is not satisfied. This potential escalation signals ongoing volatility in international trade relations.
In Asian markets, the 5-year Japanese Government Bond (JGB) yield climbed 1 basis point to 1.13%. Meanwhile, China's yuan opened at 7.1498 per dollar, strengthening slightly from its previous close of 7.1547. Separately, South Korea's trade envoy is set to proceed with a meeting with their U.S. counterpart during an upcoming visit, as confirmed by the finance ministry, indicating ongoing diplomatic efforts on trade.
Corporate Policy Shifts
In corporate news, TD Bank (TD) has mandated a four-day office return for its employees. This move reflects a broader trend among financial institutions to increase in-office presence post-pandemic.
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.