Monex: US Dollar Bears Return as Markets Bet on September Rate Cut and Fed’s Independence Faces Pressure

According to Jinse Finance, Monex USA trading director Helen Given reported that dollar bears made a strong comeback today following Powell’s speech at Jackson Hole and Trump’s threat to fire Federal Reserve Governor Cook. The first substantial move naturally occurred when Powell indicated that downside risks in the labor market are gaining more weight in the Fed’s decision-making process. The reaction we observed in the forex market is directly linked to the sharp increase in the probability of a 25-basis-point rate cut in September, as Powell decisively opened the door for this today. Traders also believe there is a significant chance of another 25-basis-point cut later this year, while the overnight swap market has, for the first time, made a major bet on notable easing in the first half of 2026. Trump’s comments about Cook have once again raised concerns over the Fed’s independence, as the government’s desire to reshape the Fed in its own image becomes increasingly apparent. If Trump gets the rate cuts he wants from Powell and his colleagues in the second half of the year, he may be able to continue serving as chairman during his term, but for now, the market still does not believe any action by the Fed this year will be enough to satisfy Trump.