Major US stock indices settle the day higherAtlanta Fed Pres. Bostic: Right now would wait on cutting ratesRubio: We have agreed on specific steps that will bring a serious situation to an endWTI crude oil futures settle at $66.38Fed's beige book: Economic activity increased slightly from late May through early JulyUS Senator Tillis: Firing of Powell on economic decision would undermine US credibilityBOE's Mann: My view is it's going to take some effort to get inflation downTrump’s Fed feud escalates: Powell stays, for nowAxios: Very close to an agreement that would lead to a halt between Israel and SyriaTrump: Fed Chair Powell is too late, but he does not planning on doing anythingCanada to lower tariff order levels from 100% to 50% of 2024 volumes for steel productsBloomberg: Pres Trump likely to fire Feds Chair Powell soonIsrael PM Netanyahu coalition loses its majorityTrump asked GOP leaders if he should fire Powell.NEC Hassett: The US inflation data has been fine. The Fed needs to get back on the curveWeekly crude oil inventories -3.859M versus -0.552M estimateUSTR Greer:US is losing advanced manufacturing along with basic manufacturingGeopolitics: Massive strikes by Israel on Defense Ministry in DamascusAfter PPI, Pantheon sees core PCE at 0.28% for the month of JuneUS industrial production estimate 0.3% versus 0.1% estimateUS PPI final demand MoM 0.0% versus 0.2% estimate. YoY 2.3% vs 2.5% estimateCanada June housing starts 283.7K vs 259K expectedForexLive European FX news wrap: UK CPI comes in hotThe Trump/Powell saga surrounding Fed Chair Jerome Powell took a dramatic turn this week, beginning with reports that President Trump had drafted a letter to fire him. The letter was said to be circulating among Republican leaders for feedback, suggesting that a formal move could be imminent. Bloomberg confirmed that Trump's was likely to fire chair Powell soon, prompting a selloff in the US dollar, stocks falling, and the treasury curve steepening.Then during press briefing in the White House the added fuel to the fire, with personal jabs at Powell, referring to him as “Too-Late” and “Knucklehead.” He also hinted at potential “fraud” related to Federal Reserve building renovations—implying a possible legal basis for dismissal. But just as quickly as the story gained momentum, Trump reversed course, stating he was not looking and it was unlikely that he would fire Powell after all. The abrupt reversal injected further confusion into markets and politics alike leading to a move back higher in the US dollar, and stocks moving higher. Yields remain lower but the longer ended move back down with the 30 year moving from 5.06% back to 5.01%.Behind the scenes, reports surfaced that the White House is internally divided on whether the president even has the authority to fire a sitting Fed Chair. The legal ambiguity and political fallout appear to have stalled the plan—for now.In what may signal a new tactic, Trump shifted the focus away from Powell directly and toward the Fed’s Board of Governors, stating “the board is not doing its job.” With allies like Governors Bowman and Waller already in place, Trump may now try to influence policy by exerting pressure on other board members rather than removing Powell outright. Time will tellIn the end, what started as a potential firing turned into a high-stakes power play. Whether it was a genuine threat or a strategic feint, the episode underscores the growing tension between the Fed and the White House—and raises fresh questions about how far that conflict might go.There is never a dull day.On the economic front U.S. Producer Price Index (PPI) was flat in June, falling short of expectations for a 0.2% monthly increase and following a 0.3% rise in May. Core PPI, which excludes food and energy, also came in unchanged, signaling a softening trend in wholesale inflation. While goods prices rose modestly—driven in part by tariffs—the increase was offset by a decline in service-sector prices. On a year-over-year basis, headline PPI slowed to 2.3%, the lowest level since September 2024, while core PPI eased to around 2.6% from 3.0%. The data suggests that inflationary pressures remain contained, despite some early signs of tariff pass-through. With service costs cooling and overall producer prices stagnating, the report supports the case for the Federal Reserve to begin considering rate cuts later this year—though officials are likely to wait for further data before making any firm moves. There is still uncertainty as far as future moved higher as a result of the tariffs which are still yet to be determined. Nevertheless, the estimate for the core PCE from the CPI and the PPI data imply a gain of 0.28% when it is released later this month (according to Pantheon Macro specialize in crunching and modeling the data). That is the good news. The not so good news is that they also anticipate a 0.35% gain in July and that core PCE ends the year at 3.25%, well above the 2% target for the Fed.What to do? But what we now is present Trump would cut rates to 1%.Atlanta Fed Pres. Bostic is not a Fed official would support Pres. Trump's desire to slash rates. Bostic said he would hold off on cutting rates for now, citing concerns that inflation may be at an inflection point. He noted that the latest CPI data suggests inflation pressures are building, and emphasized the importance of preserving the Fed’s credibility by staying focused on its inflation target. Bostic downplayed media narratives around the Fed, saying he focuses on “things that actually matter” like data and business input. He also remarked that this isn’t a textbook tariff situation, as businesses are adjusting prices in nontraditional ways. The full inflationary impact of tariffs may not be seen until 2026, he added. Ultimately, Bostic stressed that future policy decisions will be guided by incoming data, and reminded that the Fed operates as a committee with a range of views.In other news, Israel's PM Netanyahu authorized a massive stroke nonserious defense minister in Damascus. After criticism from. Sec. of State Rubio, he later announced that there could be a cease-fire agreement as early as tonight. It was also announced that Israel's PM losses coalition majority with the Shas party announcing the the coalition turning Netanyahu's support into a minority coalition. He seems to do it his way. Meanwhile, US Middle East envoy Witkopf said Gaza negotiations are going good.In Canada PM. Carney said that he will continue to work for a US trade deal for Canadian workers but that deal is not yet on the table.. Carney also said that Canada has become too dependent on US and must diversify trade relationships and relied more on Canadian steel for Canadian projects.US stocks closed higher. A snapshot of the closing levels shows: Dow industrial average +0.53%S&P index +0.32%NASDAQ index +0.25% Russell 2000+0.99%Looking at the US yield curve: 2-year yield 3.895%, -6.3 basis points5-year yield 3.997%, -5.6 basis points10 year yield 4.459%, -3.0 basis points30 year yield 4.013%, -0.4 basis points.Tomorrow US retail sales, initial jobless claims This article was written by Greg Michalowski at www.forexlive.com.