Political pressure and economic data
Powell’s stance has continued to draw scrutiny from President Donald Trump, who has repeatedly urged aggressive rate cuts and called for Powell’s resignation. The president has also targeted Fed Governor Lisa Cook, accusing her of financial improprieties, allegations she has denied.
Analysts noted that the Fed faces a challenging policy environment. Inflation remains above the 2% target, while recent labor market indicators suggest some softening, according to The Wall Street Journal. Upcoming data releases—including the August jobs report on September 5 and inflation data the following week—are expected to heavily influence the Fed’s decision later next month.
In Canada, retail sales rose 1.5% in June, driven by increased spending on food and beverages, in line with market expectations. A preliminary estimate for July pointed to a 0.8% decline.
Market strategists from Scotiabank said the Canadian dollar’s recovery late in the week reflected the combination of dovish signals from the Fed and the easing of trade tensions with the US.
