Doves circling, but no consensus just yet: Most Federal Reserve officials see interest rate cuts coming this year, but remain divided on when and by how much, minutes (pdf) from the Fed’s 17-18 June meeting show. While “most participants assessed that some reduction […] would likely be appropriate,” others cautioned against moving too soon, citing a still-resilient economy and inflation that remains above target.

The keyword is tariffs: The divide is mostly due to a lack of certainty around the impact of tariffs on inflation. “While a few participants noted that tariffs would lead to a one-time increase in prices and would not affect longer-term inflation expectations, most participants noted the risk that tariffs could have more persistent effects on inflation,” the minutes said. Some also said inflationary effects could be “more limited” if firms adapt or trade agreements are struck.

REMEMBER- The majority of Fed policymakers expect two or more rate cuts this year, after they held benchmark rates steady in June at 4.25-4.50% for the fourth consecutive meeting.

Views are diverging on the next meeting: Some policymakers floated a cut “as soon as the next meeting” at the end of the month, while others saw no need for reductions at all this year. On the question of how much, several said the current rate “may not be far” from neutral, implying limited room for easing. Others pointed to softening inflation and labor market cooling, warning of “difficult tradeoffs” if inflation proves sticky while employment weakens.

The data sends mixed signals…: June job growth surprised to the upside with 147k new payrolls and a drop in unemployment to 4.1%, CNBC reports. Still, consumers are pulling back, with May retail sales falling 0.9% and personal spending dipping 0.1%.

…and Trump applies pressure: President Donald Trump continues to publicly lash out at Fed Chair Jerome Powell, demanding deep cuts and even calling for his resignation. Powell has pushed back, stressing the Fed will base its decisions on data, not politics.

ALSO FROM PLANET FINANCE-

ALSO- BTC hit another record yesterday, reaching a peak of USD 116,046 and surpassing an earlier record this week as it continues to rally off the back of increased demand from institutional investors and Trump’s crypto-friendly policies. (Reuters)

MARKETS THIS MORNING-

Asian markets are mixed following news of the US’ larger-than-expected tariffs on Canada and other trading partners. While Hong Kong’s Hang Seng and mainland China’s CSI 300 opened higher, and South Korea’s Kospi is up, Japan’s Nikkei is trading down after opening in the green. Over on Wall Street, futures opened flat after another day in the green for the S&P 500.

ADX

10,048

-0.0% (YTD: +6.7%)

DFM

5,830

-0.1% (YTD: +13.0%)

Nasdaq Dubai UAE20

4,811

-0.1% (YTD: +15.5%)

USD : AED CBUAE

Buy 3.67

Sell 3.67

EIBOR

4.2% o/n

4.4% 1 yr

TASI

11,277

-0.0% (YTD: -6.4%)

EGX30

33,324

+0.5% (YTD: +12.0%)

S&P 500

6,280

+0.3% (YTD: +6.8%)

FTSE 100

8,976

+1.2% (YTD: +9.8%)

Euro Stoxx 50

5,438

-0.1% (YTD: +11.1%)

Brent crude

USD 68.91

+0.4%

Natural gas (Nymex)

USD 3.37

+0.8%

Gold

USD 3,335.70

+0.3%

BTC

USD 113,620

+2.3% (YTD: +20.3%)

Chimera JP Morgan UAE Bond UCITS ETF

AED 3.51

0.0% (YTD: -1.6%)

S&P MENA Bond & Sukuk

145.84

0.2% (YTD: +4.2%)

VIX (Volatility Index)

15.78

-1% (YTD: -9.1%)

THE CLOSING BELL-

The DFM fell 0.1% yesterday on turnover of AED 818.4 mn. The index is up 13.0% YTD.

In the green: Emirates Investment Bank (+11.0%), Dubai Refreshment Company (+10.8%) and Drake and Scull International (+8.3%).

In the red: Deyaar Development (-3.8%), Orascom Construction (-3.7%) and Emirates Central Cooling Systems Corporation (-2.3%).

Over on the ADX, the index remained flat on turnover of AED 1.3 bn. Meanwhile, Nasdaq Dubai was down 0.1%.

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