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Trump Remarks on Fed, Trade Send Dollar Lower

The fixed income and currency markets were rattled this week by comments from President Trump impinging on the independence of the Federal Reserve's mandate to set monetary policy.  The criticisms of the recent increases in interest rates were seemingly tied to the burgeoning trade war as the President stated earlier that tariffs on the entire range of Chinese imports are "ready to go."  The dollar moved lower as a result of the remarks. 

The week's economic indicators were positive, with the exception of some weakness in the housing market.  Both housing starts and building permit issuance declined in June.  Although large declines were isolated to the multifamily sector, the small increase in single family housing starts may portend future weakness there.  The labor market continued to fire on all cylinders this week, with initial jobless claims declining to levels last seen in 1969, when the civilian labor force was approximately half of today's size.

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