This morning, financial markets are generally stable and cautious. U.S. stock futures are flat to slightly lower following recent session volatility, while European and Asian markets are mixed as investors await policy signals and new economic indicators.
Following last week’s rate cut by the Federal Reserve, Jerome Powell’s latest remarks suggested that while further reductions are possible, they are by no means guaranteed. The central factor driving this cautious stance remains inflation. By reiterating the Fed’s long-standing 2% inflation target, Powell reinforced the message that the institution is firmly committed to achieving this goal, rather than adjusting it upward despite evolving economic conditions. He further highlighted that near-term risks remain skewed: inflation risks appear tilted to the upside, while risks to employment are leaning to the downside. This balance underscores the delicate trade-offs in the Fed’s ongoing policy decisions and signals that the path forward will depend heavily on incoming data.
The U.S. government has made it clear that it is prepared to take robust action to support Argentina’s struggling economy. Treasury Secretary Scott Bessent indicated that all options are on the table, including currency swaps, direct purchases of Argentine pesos, and acquisitions of U.S. dollar-denominated Argentine government debt from the Treasury’s Exchange Stabilization Fund. This commitment comes amid severe financial turmoil in Argentina, which has prompted sharp declines in its currency and assets. The U.S. sees Argentina as a strategically important ally in Latin America and is ready to provide the necessary assistance to stabilize the country’s economy and help preserve political and economic stability.