The market remains focused on tariffs and the Fed, as Trump’s aggressive rhetoric and the recent US budget bill have brought tariffs back into the spotlight. Investors are waiting to see if the Fed will cut rates in 2025 and by how much, with data playing a key role in expectations. Trump’s comments about potentially firing Fed Chair Powell have added to market volatility, with bond yields reacting to the uncertainty.

Despite mixed UK data, markets are still pricing in a 75% probability of a 25bps rate cut by the Bank of England in August. Average earnings are growing at 5%, but other indicators suggest a softening of the UK labor market. The pound is slightly lower today against the euro, driven by a stronger dollar.

Read more at Investing.com: US Dollar Slips as Trump’s Criticism of Fed Sparks Market Uncertainty