Overview

• The dollar fell to a fresh 3½-year low against the euro after President Trump criticized Jerome Powell and signaled he might name a new Fed chair by September or October.
• Traders now see a one-in-four chance of a rate cut at the Fed’s July meeting and expect 64 basis points of reductions by the end of the year.
• Trump’s public attack on Powell for not lowering interest rates sharply has stoked worries over the erosion of Federal Reserve independence.
• JPMorgan warned that the president’s tariff plans could slow U.S. growth, lift inflation and raise the chance of a recession to about 40%.
• European currencies have strengthened to multi-year highs as investors question U.S. exceptionalism and prepare for a July 9 deadline on trade deals.