USD/Fed tensions escalate: Trump pushes for rate cuts amid inflation

USD volatility remains muted as President Trump intensifies pressure on Federal Reserve Chairman Jerome Powell to lower interest rates, despite US inflation running above the Fed's 2% target for four consecutive years. The dollar index holds steady near 105.50 as markets assess the political conflict's impact on monetary policy. Current economic conditions show robust growth with unemployment at 3.5% and GDP expanding at 2.8% annually, making rate cuts difficult to justify. The Fed maintains its hawkish stance, with futures pricing only a 15% probability of cuts before year-end. Technical indicators suggest USD consolidation between 105.00 support and 106.20 resistance. Trump's likely nomination of a dovish Fed chair replacement in May 2025 adds long-term uncertainty. Traders should monitor upcoming FOMC meetings for any shifts in rhetoric, though near-term policy changes appear unlikely given persistent inflationary pressures from proposed tariffs.