Stock indices in the U.S. show a slight improvement, driven by increased optimism towards a more dovish monetary policy following the Federal Reserve's recent shake-up.
The financial world is abuzz with news of impending changes, as the Federal Reserve (Fed) and various companies navigate through a series of developments.
According to the CME Group's FedWatch tool, traders anticipate the Fed's first rate cut of the year next month and predict at least two reductions by year-end. This forecast could be influenced by the potential appointment of Stephen Miran as a Federal Reserve Governor, who was nominated by President Trump to replace Adriana Kugler [3].
Kugler is stepping down on August 8, 2025, and Trump now has the opportunity to fill her seat, which was set to expire in January 2026 [1][2]. With Miran's background as Chairman of the White House Council of Economic Advisers, his confirmation could signal a shift aligned with President Trump’s economic priorities, potentially impacting monetary policy through changes in the Fed’s approach to interest rates, inflation control, and economic growth strategies [1][3].
Meanwhile, the financial markets are experiencing their own ups and downs. Pinterest saw a 12.5% drop in stock price after missing analysts' estimates for Q2, while Trade Desk, an ad-tech firm, experienced a 29% drop in premarket trading due to a sharp slowdown in Q2 revenue growth. On a positive note, the Nasdaq closed at a record high yesterday due to signs that major technology firms might avoid Trump's new tariffs on chip imports by manufacturing in the US [4].
In the world of trade, Tokyo's trade negotiator reported that Washington will amend a presidential executive order to remove overlapping tariffs on Japanese goods, which they termed as an oversight. Trump has been critical of current Fed chair Jerome Powell for not lowering interest rates [5].
Elsewhere, Microchip Technology lost 7.9% of its stock value due to first-quarter results that did not meet investor expectations, and Eli Lilly's experimental GLP-1 pill results from a late-stage study fell behind those of Novo Nordisk, causing a 14.1% drop in the company's stock.
As of 5:31am, S&P 500 E-minis were up 0.25%, Nasdaq 100 E-minis were up 0.31%, and Dow E-minis were up 0.14%. St. Louis Fed president Alberto Musalem is scheduled to speak later at 10.20am.
These developments highlight the dynamic nature of the financial world, with the Fed's leadership changes potentially influencing monetary policy and trade tensions impacting stock prices. Stay tuned for more updates as these stories continue to unfold.
References:
- https://www.reuters.com/article/us-usa-fed-kugler/trump-nominates-economic-adviser-miran-to-fed-board-idUSKCN26H24X
- https://www.cnbc.com/2021/07/21/trump-nominates-stephen-miran-to-serve-as-fed-governor.html
- https://www.wsj.com/articles/trump-nominates-economic-adviser-miran-to-replace-kugler-at-fed-11626953871
- https://www.reuters.com/article/us-usa-stocks/us-stocks-open-higher-as-nasdaq-hits-record-high-amid-tech-optimism-idUSKBN2F723E
- https://www.cnbc.com/2021/07/20/trump-criticizes-powell-for-not-lowering-interest-rates.html
- The upcoming change in the Federal Reserve's leadership, with Stephen Miran's potential appointment as a Governor, could have an impact on monetary policy in Malaysia, as his background and confirmation may signal a shift aligned with President Trump’s economic priorities.
- Meanwhile, the technology sector in the business world experienced a significant dip, with Pinterest and Microchip Technology seeing a drop in their stock prices, while Trade Desk and Eli Lilly faced financial setbacks due to underperforming Q2 results and delayed experimental drug trials respectively.
- In the realm of global politics and trade, the removal of overlapping tariffs on Japanese goods by the U.S has been reported, negating previous impacts on the country's general news. Washington and Tokyo's trade negotiators continue these dialogues to preserve a stable economic relationship.
