His statement came just four days before the meeting. Pressure is mounting on Fed Chair Jerome Powell from both political and economic fronts. While expectations of a rate cut are weakening, Rieder’s remarks stood out. 

Would a Rate Cut Benefit the Economy? 

BlackRock Rieder argued that high interest rates are putting pressure on the housing market. He stated that the current levels make borrowing expensive and refinancing unattractive. This situation has led to declining homeownership rates and a contraction in the construction sector. 

“If we lower interest rates, home prices could fall, and we could build more homes,” said Rieder, suggesting this could also help bring inflation down. He also noted that current rates remain effective in containing inflation. 

However, strong employment data released in the U.S. have dampened hopes for a rate cut. Investors have largely scaled back their expectations for a July reduction. Still, figures like Rieder believe the Fed is enforcing an overly tight policy. 

The Fed’s Decision Process and Rising Political Pressure 

According to CME FedWatch Tool data, the probability of a rate cut at the July meeting is only 4.1%. This figure implies a potential cut to 400–425 basis points, while the chance of rates remaining unchanged stands at a dominant 95.9%. 

Meanwhile, Fed Chair Jerome Powell is facing not just economic but also political pressures. U.S. President Donald Trump has intensified his criticism of Powell, blaming him for economic damage due to his refusal to lower rates. 

Additionally, Powell is facing another crisis. Representative Anna Paulina Luna accused Powell of lying twice during a Senate testimony and referred the issue to the Department of Justice. This raises questions about Powell’s credibility and tenure. 

Ultimately, the Fed’s decision will be shaped not only by economic indicators but also by political winds. Calls for a rate cut are growing louder, but the real answer will come at the FOMC meeting.

You can also freely share your thoughts and comments about the topic in the comment section. Additionally, don’t forget to follow us on our Telegram, YouTube, and Twitter channels for the latest news and updates. 

The post BlackRock CIO Calls for Fed Rate Cut as FOMC Nears! appeared first on Coin Engineer.

Why Is the Dollar Gaining Strength?

There are several key factors behind the dollar’s rising dominance in global payments. Most importantly, the US Federal Reserve’s tight monetary policy plays a central role. The Fed’s decision to keep interest rates high continues to attract investors to the dollar, putting pressure on the currencies of emerging markets.

Additionally, increasing geopolitical risks push global investors toward the dollar as a safe haven. The Russia-Ukraine war, uncertainty in the Middle East, and trade tensions in Asia have made the dollar even more indispensable in global transactions.

You Might Be Interested In: Elon Musk Talks About the Name of a New Memecoin!

What Will Be the Economic Consequences?

The dollar’s overwhelming dominance in global payments may create various effects on different countries:

• For emerging economies, the cost of external borrowing could increase further. Countries repaying debts denominated in dollars may face significant budget deficits.
• The US dollar’s supremacy in global trade could reduce the usage of other currencies, potentially weakening other reserve currencies like the Euro and Yen.
• For the US economy, high demand for the dollar could widen the trade deficit. However, this could also strengthen demand for US bonds and assets in the short term.

Is This the Start of a New Financial Era?

Experts argue that the dollar’s growing dominance further consolidates the dollar-centric structure of the global financial system. This development may accelerate the efforts of some countries to create alternative payment systems. In particular, BRICS countries are working on new strategies to reduce their dependence on the dollar.

Still, in the short term, a significant decrease in dollar dependency seems unlikely. On the contrary, the dollar’s dominance in global transactions may deepen even further.

You can also freely share your thoughts and comments about the topic in the comment section. Additionally, don’t forget to follow us on our Telegram, YouTube, and Twitter channels for the latest news and updates.

The post US Dollar Dominance Is Increasing! What Will Be The Economic Consequences? appeared first on Coin Engineer.