Although Trump has increased pressure on Jerome Powell in recent weeks, the likelihood of a 300 basis point cut is very unlikely. Typically, the Federal Reserve adjusts rates between 25 and 50 basis points with each increase or decrease, with a gradual reduction over the coming months being the most plausible option.

With 21 days until the next FOMC meeting, the probability that the Fed will keep the interest rate stable between 425 and 450 has skyrocketed to 91%. Meanwhile, the probability of a rate cut by the Fed in July has fallen to 8% from a previous high of 23%. These probabilities increased dramatically in light of calls for an investigation into Powell's misleading statements during a Senate hearing.

However, solid employment data from the United States in early July has dampened enthusiasm for a Fed rate cut. Furthermore, Trump's new tariffs on Japan and South Korea are fueling new inflationary concerns for the economy.

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