Wall Street set to open higher on rate cut optimism

25 basis point cut priced in. Will he go further

Federal Reserve chairman signals cut in US interest rates

Federal Reserve Chairman Jerome Powell shored up rate cut hopes with his testimony before the Senate Banking Committee Thursday and House Financial Services Committee Wednesday.

Strategists at Bank of America-Merrill Lynch said it remained "contrarian bullish" in anticipation of an "overshoot" in credit and equity prices over coming months, but followed by an overshoot in gold before a "big top" in asset prices during the back half of the year as the bond bubble popped and central bank's "policy impotence" became apparent. But the uncertainty stirred by the Trump administration's multi-fronted trade disputes is weighing on the outlook. Tim Scott, a South Carolina Republican. Whether FOMC officials will opt for the "kitchen knife" or the "machete" when cutting USA interest rates can have a broader effect on global sentiment.

"Business investment is critical".

Powell said, "Crosscurrents have reemerged", adding, "Many FOMC participants saw that the case for a somewhat more accommodative monetary policy had strengthened". The primary PPI is expected to have risen 1.6% for the month over last year, slower than the 1.8% year-over-year increase in May.

The market shrugged off slightly higher-than-expected consumer price data, released earlier.

The Fed, however, tracks a different measure of price pressures, and that has drifted well below target.

"Powell's prepared testimony struck a decidedly dovish cord with "uncertainties" over trade and global growth since the June FOMC meeting characterized as having dimmed the outlook." said Ian Lyngen, head of USA rates at BMO Capital Markets.

In his testimony on Capitol Hill, Mr Powell said growth had "moderated" and that there was "a risk that weak inflation will be even more persistent than we now anticipate".

Powell also attacked Facebook's plans to launch an online currency called Libra.

"Its critical that the public understand that we're always going to do our work objectively", Powell said.

West Texas Intermediate crude increased 0.2% to US$60.34 a barrel.

He said: 'Libra raises many serious concerns regarding privacy, money laundering, consumer protection and financial stability'.

"The law clearly gives me a four-year term and I fully intend to serve it".

In testimony to the US Congress, he stressed the importance of keeping the US economy growing to ensure that its benefits reach Americans left at the margins and said that the Fed would deploy all its tools to support continued expansion.

"It isn't obvious at all from our current regulatory system that we have in place what we need to assess and provide oversight over this, and I expect we'll be working hard on this", Powell said.

Oil prices retreated from early gains after the Organization of the Petroleum Exporting Countries forecast less demand for its crude next year.

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