Given the current confusion within the Federal Reserve and the mounting pressure on its Chair Jerome Powell, not all policymakers agree that interest rates should remain elevated.

Thomas Barkin, President of the Federal Reserve Bank of Richmond, recently stated that in his view, the next head of the U.S. central bank would also pursue monetary policy that is best for the economy — not for the White House. He also emphasized that the Fed's rate-setting committee is not obliged to follow the Chair's guidance. "I want to hope and believe that this person will try to determine the best policy for the country," Barkin said.

It's worth noting that President Donald Trump, who continually urges the Fed to lower rates, will have the authority to appoint a new Fed Chair when Jerome Powell's term ends in May of next year. However, judging by recent developments, Trump seems to be trying to force Powell out ahead of schedule. It is also expected that the President would choose someone willing to cut rates, raising concerns about the future independence of the Fed.

Candidates reportedly being considered for the position include former Fed Governor Kevin Warsh, Treasury official Scott Bessent, National Economic Council Director Kevin Hassett, and current Fed Governor Christopher Waller. All of them have expressed readiness to lower interest rates.

Responding to audience questions, Barkin also noted that there have been rare instances in the Fed's history when the Federal Open Market Committee (FOMC) did not follow the Chair's recommendations. "It happens," he said. "We'll see."

As for the latest key data, Barkin stated that inflation figures for June show a rise in price pressures, and those pressures are likely to intensify. At the same time, he noted uncertainty about how much of the tariffs businesses will be able to pass on to consumers, who may not be able to cope with further price increases. "There are suppliers who, encouraged by recent inflationary experience, feel justified in trying to pass on price pressures," he said. "And there are consumers, worn out by inflation, who are already shopping at lower price points." According to him, this clash between sellers and consumers "has yet to play out."

Uncertainty regarding pricing strategies and companies' ability to offset rising tariffs is a key risk factor for the stability of the U.S. economy. If businesses are unable to pass tariff costs onto consumers, this could hurt profitability and lead to reduced investment and job cuts. On the other hand, if companies attempt to fully shift the burden to consumers, it could further fuel inflation and weaken consumer demand.

Barkin stressed that the Federal Reserve is closely monitoring developments and stands ready to take necessary measures to support price stability and maximum employment. However, he noted that effective policy requires thorough data analysis and consideration of multiple interconnected factors, making economic management especially complex under current conditions.

Current Technical Outlook for EUR/USD

Buyers now need to focus on reclaiming the 1.1655 level. Only this would allow for a potential test of 1.1690. From there, the pair might rise to 1.1720, though reaching this level without backing from major players could prove challenging. The most ambitious target remains the 1.1770 high. In the event of a decline, strong buying activity is expected around 1.1590. If no significant interest appears there, it would be wise to wait for a retest of the 1.1550 low or consider long positions from 1.1495.

Current Technical Outlook for GBP/USD

Pound buyers need to break through the nearest resistance at 1.3420. Only then can they aim for 1.3464 — a level that may be difficult to surpass. The furthest upward target is the 1.3500 level. If the pair declines, bears will try to regain control at 1.3375. If they succeed, a break of that range would deal a serious blow to the bulls and push GBP/USD toward the 1.3335 low, with potential to reach 1.3290.