Fed Chair Jerome Powell struck a careful balance in his semi-annual testimony to Congress this week, offering no signal that a July cut is likely, while keeping the door open to reductions later in the year, depending on how the price and activity data unfold. For now, Powell still has the undivided ear of markets and lawmakers, but there is a question over how much longer that will last, with reports suggesting President Trump is considering nominating his successor as early as September. This potential "shadow chair" would likely seek to steer the market towards expectations of looser policy and lower bond yields while Powell serves his term out.
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