Dollar slammed after Powell's bleak U.S

Federal Reserve chairman signals cut in US interest rates

Most Federal Reserve officials expressed concern at a meeting last month that the outlook for the US economy was weakening, and many said the Fed should soon cut rates if uncertainty continued to weigh on growth.

The benchmark S&P 500 breached the 3,000 points mark for the first time on Wednesday, as hopes of an interest rate cut later this month were lifted by Federal Reserve chief Jerome Powell's comment that the central bank would "act as appropriate" to sustain record USA growth.

"Concerns about the strength of the global economy continue to weigh on the U.S. outlook", Mr Powell said. "It needs a careful look, so I strongly believe we all need to be taking our time with this".

Worker pay isn't rising fast enough to push up inflation, Federal Reserve Chairman Jerome Powell says, even with the unemployment rate near a five-decade low. "So they figure keep trying this until something happens".

Asian shares inched ahead on Wednesday while higher Treasury yields lifted the dollar as markets wondered if the world's most powerful central banker would confirm or confound expectations for USA policy easing this month.

Meanwhile, the yield on 10-year Treasuries slipped to 2.04%.

The Nasdaq is up 1,567.25 points, or 23.6%.

Powell testifies to Senate Banking Committee on ThursdayECB minutes are due on Thursday.A key measure of USA inflation - the core consumer price index, due Thursday - is expected to have increased 0.2% in June from the prior month, while the broader CPI is forecast to remain unchanged.US producer prices are due on Friday. On Thursday, he will address the Senate Banking Committee.

Gold markets of course are reacting to the idea that the Federal Reserve is ready to cut interest rates, just as other central banks around the world are.

Some Fed watchers have suggested that cutting rates now would serve as an insurance policy of sorts by the central bank against a potential economic downturn.

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The Fed has kept its current benchmark overnight interest rate in a range of between 2.25 percent and 2.50 percent since December.

After Powell's remarks and release of the Fed's minutes, interest rate futures appeared to price in greater odds of an aggressive rate cut this month.

The U.S. economy did not change much in the days that followed Trump's May 30 comments on Twitter threatening to impose tariffs on Mexico unless the country met his demands for tougher controls on immigrants crossing its northern border.

"The Fed has never disappointed a market with such strong expectations of action", Joseph Lavorgna, chief economist for the Americas at Natixis, wrote in a recent analysis.

The chance of a 50 bps cut rose to 27.6 per cent from 3.3 per cent on Tuesday, according to CME Group's FedWatch tool.

Powell said last Friday's relatively strong U.S.jobs report had no impact on the Fed's economic outlook.

Despite the now low United States unemployment rate, he said inflation remains "muted" and wage growth is modest.

The only question left seems to be: How low will borrowing costs go this month?

Still, Wall Street expects Fed chair's congressional testimony to catalyze another messy clash with President Trump, who has made no secret of his disdain for the Powell-run central bank. The minutes show FOMC member concern over soft economic data such as the weak jobs report from April, weakening indicators for business confidence and spending, decreased manufacturing activity and the ongoing trade tensions - mainly between China and the US.

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