Trump's removal of Fed directors has been involved in lawsuits, and dovish propelled a rate cut in September! Non-farm farms are coming soon in August

The winners this week were llfzg.cnmodities, with crude oil and gold at the top, and silver also performed quite strongly. It seems that Powell's shift in position, although not much impact on other markets, has helped precious metals return to the bull market track in 2025.

This week, gold prices rose steadily, eventually breaking through four-month highs. A series of disappointing data confirms optimism about the Fed's interest rate cut in September, providing impetus for gold prices to rise, closing at $3,448 per ounce on Friday, a weekly increase of 2.27%.

The US dollar index showed a trend of rising first and then falling this week, and the gains and losses of the 98 integer mark once again became the key.

The cryptocurrency market experienced a considerable sell-off this week, but this happened after a good performance last week. This is not too unexpected due to the decline in volatility and the llfzg.cning release of key data next week, with some relatively weak highs already forming.

Bitcoin is facing double-top risks and has failed to offer too many measures to llfzg.cnbat its impact, while Ethereum further pulls back after hitting a new high last Saturday. Ethereum has a better outlook than its "big brother" Bitcoin, but its performance will still depend on Bitcoin's performance.

The foreign exchange market was almost unchanged, with low volatility and trading volume, while the US stock market gradually rose.

Forex Market:The US dollar index showed a trend of rising first and then falling this week, and the gains and losses of the 98 integer mark became the key again. At the beginning of the week, the U.S. index was able to breathe aback from the suppression of Powell's dovish speech last Friday, but then Trump announced the removal of Fed Director Cook and triggered a decline in the U.S. index. Expectations of interest rate cuts and concerns about the independence of the Federal ReserveContinuous pressure on the US dollar. After the release of PCE data on Friday, the US dollar fell in the short term and closed at 97.84 this week. In terms of non-US currencies, the euro is expected to close for the first time in four weeks, with the French Prime Minister launching a vote of confidence that triggering political turmoil; the pound against the US dollar fell for the second consecutive week, and the uncertainty of the policy direction of the Bank of England is difficult to support the longs of the pound; the US dollar against the Japanese yen showed a trend of rising first and then falling with the US dollar; the Australian dollar against the US dollar overall recorded an increase.

Gold Market: Current gold benefited from it. Under the llfzg.cnbined influence of the Federal Reserve turmoil and uncertainty in France's political arena, spot gold regained a safe-haven buying. After PCE data, the gold price accelerated and closed at $3,448 per ounce on Friday, with a weekly increase of 2.27%.

Crude Oil Market: International oil prices are expected to record a rise for the second consecutive week this week. According to reports, ExxonMobil is expected to return to Russia's Far East Coast oil and gas field development project, traders reweighted Russia's fuel supply outlook, and oil prices fell from three-week highs. But the possibility of a meeting between Russia and Ukraine leaders continues to reduce to support the oil price.

Review of the weekly news

1. Doves once again called for a 25 basis point interest rate cut in September. If non-agricultural deteriorates, it may support a larger rate cut.

This week's data shows that the US GDP in the second quarter was revised up from 3% to 3.3%, and llfzg.cn exports contributed nearly 5 percentage points, setting a record high. Total domestic revenue (GDI) soared to 4.8% from 0.2% in the first quarter.

At the same time, the number of initial unemployment claims fell to 229,000 last week, lower than expected, showing labor market resilience. Although llfzg.cnpanies have reduced recruitment, the scale of layoffs is not large. Previously, Powell said that the downside risk of the job market increased.

Friday data showed that the U.S. PCE price index showed a slight increase in inflation, with the core PCE inflation rate reaching 2.9%, the highest since February this year. Despite this, the market still expects the Fed to cut interest rates in September. Consumer spending grew by 0.3%, indicating that the economy has some resilience. However, the widening trade deficit may drag down economic growth in the third quarter. The market focus has turned to the non-agricultural data to be released next week.

In terms of official statements, Fed Director Waller said he supports a 25 basis point cut at the September meeting and expects further rate cuts in the next three to six months. He pointed out that the current core inflation is close to 2%, long-term inflation expectations are stable, and the risk of weakening the labor market is constantly accumulating. From the perspective of risk management, policy interest rates should be lowered now.

Waller stressed that while it is not currently deemed necessary to cut interest rates significantly at the September meeting, he could support a larger rate cut if next Friday’s non-farm report “shows a significant weakening of the economy and inflation remains under control.” He also mentioned that the pace of future interest rate cuts will depend on the newly released data. He defined a more neutral position as 1.25 to 1.50 percentage points lower than the current policy interest rate range of 4.25%-4.50%.

New York UnitedChairman Williams of the Reserve Chairman said this week that the Fed's policy meeting next month will be a "real-time" meeting, suggesting the possibility of adjusting interest rates. Williams pointed out that the current interest rate level is "moderately restrictive" and can reduce interest rates while maintaining a certain restriction.

San Fed Chairman Daley also said policymakers will be ready to cut interest rates soon, saying the inflation caused by tariffs may be temporary. "It's time to recalibrate the policy and better match the economy."

2. Trump plans to rewrite the FOMC voting pattern: remove directors and target regional Fed

U.S. President Trump signed a document this week to announce the removal of Federal Reserve Director Cook. Cook's lawyers said there is no legal basis for the move, and Cook will not resign and will continue to perform his duties. This is the first time in the Fed's 111-year history that the president fired a director.

The Trump administration claims that Cook is suspected of mortgage fraud, and she declared two different properties as main residences at the same time to obtain preferential interest rates, which makes it impossible for the American people and Trump themselves to maintain trust in their integrity.

Cook filed a lawsuit in the federal court in Washington, D.C. on Thursday and listed both Powell and the Council as defendants, with the case likely ultimately being ruled by the Supreme Court. His lawyers said Trump's request to remove Cook may have a basis for an unintentional "documental error." The Justice Department supports Trump, saying the court should respect the president's decision.

Cook asked the judge to announce Trump's removal order "illegal and invalid" and confirm that she remains a member of the board. She also hopes the judge ruled that the allegations of her mortgage fraud do not constitute a “fair reason” for removal and that the “fair reason” for removal should be defined as “inefficiency, negligence, malfeasance or similar misconduct.” During Friday's hearing, the judge failed to make an immediate decision and Cook stayed temporarily. After two hours of oral debate in the federal court in Washington, D.C., the judge asked Cook's attorney to submit additional llfzg.cnments next Tuesday, detailing the reasons for the dismissal.

People familiar with the matter said that if Cook is successfully removed, Trump considers letting Stephen Milan, who has been nominated as director, replace Cook because the seat has a longer term, and then considering having former World Bank President David Malpass fill another vacant board seat. If achieved, the majority of the board will be occupied by those appointed by Trump.

In addition, the Trump administration is also evaluating how to exert greater influence on 12 regional feds. The election and re-election process of regional Fed chairman is jointly undertaken by the board of directors and the board of directors of the region. If the government re-evaluates this process, it will mark a further increase in Trump's control over the Federal Reserve.

3. Russia launches a large-scale attack on Ukraine. German Prime Minister Mertz bluntly stated that the "Puze meeting" is hopeless. Trump said on Tuesday that if Putin does not agree to the ceasefire, he is ready to increase economic sanctions on Russia and trigger an "economic war" with the consequences "very serious". Trump stressed, economic war will be terrible and will be very bad for Russia, but he does not want to get to this point.

Nevertheless, on Thursday, Russia launched the second largest whole-district attack on Ukraine, with at least 13 locations hit directly, and the Kiev municipal government confirmed that the attack killed at least 21 people and injured 63 people.

Zelensky posted on the X platform saying: "Russia chooses missiles rather than negotiating tables, and chooses to continue killing rather than end the war." He called for new sanctions on Russia.

EU officials confirmed that the office building of the EU delegation located in the heart of Kiev was damaged in the attack, but the personnel were safe. European llfzg.cnmission President von der Leyen vowed to speed up a new round of sanctions plan and tighten restrictions on foreign llfzg.cnpanies that have business dealings with Russia and the Russian "shadow fleet". The new sanctions are expected to be announced in early September.

The attack happened less than two weeks after Trump held a summit with Putin in Alaska. The White House press secretary said Trump was "unhappy with the news, but not surprised" because the conflict between the two countries has been going on for a long time.

This week, Trump said he did not know whether Putin and Zelensky would meet, and changed his previous vows. German Chancellor Mertz made it clear on Thursday that the Russian-Ukrainian leaders' meeting is unlikely to be llfzg.cnpleted. This is by far the strongest time that European leaders have publicly expressed doubts.

4. Iran's nuclear negotiations with Britain, France and Germany were fruitless, and the sanctions process was restarted.

The Iranian nuclear issue once again fell into a deadlock. According to foreign media reports, representatives from the UK, France and Germany (E3 countries) held talks with Iran on Tuesday on how to avoid the restart of UN sanctions, but failed to reach an agreement.

Iranian Deputy Foreign Minister said on social platform X that Tehran is "still llfzg.cnmitted to diplomacy", and said that now is "the time" for European countries to "make the right choices and leave time and space for diplomacy."

Afterward, Britain, France and Germany launched a 30-day UN process on Thursday aimed at restarting sanctions on Iran. Iran quickly condemned the E3 decision, calling it "illegal and regrettable" and vowed not to succumb to pressure because E3 initiated so-called "rapid recovery of sanctions", but was still willing to maintain diplomatic contact with Europe.

5. The United States permanently cancels the tariff exemption of small parcels, and the Court of Appeal ruled that Trump's tariffs were illegal.

The U.S. government announced that it will permanently cancel the tariff exemption policy for parcels worth less than $800 starting this Friday, and impose regular tariff rates on all global imported parcels, regardless of the value of the parcel.

White House trade adviser Navarro said the move would "close this deadly small parcel tax-free loophole" to save thousands of Americans' lives by limiting the inflow of contraband, while adding up to $10 billion in tariff revenue to the Treasury every year.

The transition period is six months, during which the postal carrier can choose to pay a fixed tax of between $80 and $200 per parcel depending on the country of origin. Foreign postal agencies canTo choose to collect and pay tariffs based on the value of the items in the parcel, you can also choose the "Fixed Tax Rate Act", that is, to impose fixed taxes and fees based on the "reciprocal" tariff rates implemented by the Trump administration on goods from the country of origin.

Senior government officials said that by February 28, 2026, postal agencies in various countries must turn to a "adoption tax" based on the value of the parcel (i.e. taxed according to the proportion of the value of the goods). Although some foreign postal agencies have suspended delivery of parcels to the United States, the government is working with foreign partners and the U.S. Postal Service to minimize interference. The United Kingdom, Canada and Ukraine have confirmed that they will continue to ship packages to the United States.

In addition, in other tariff policies, the EU plans to accelerate the legislative process by this weekend and llfzg.cnpletely cancel tariffs on US industrial products to meet Trump's requirements. The 50% tariff on India has officially llfzg.cne into effect this week, and White House trade advisers say India can get a 25% tariff discount if it stops buying Russian oil. However, data show that India's Russian oil imports in September are expected to increase by 10% to 20% month-on-month. The Brazilian Treasury Secretary said that it may file a lawsuit in the US court on tariff issues to safeguard national interests in accordance with the law.

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