Trump grabbed market attention with a series of posts on his social media platform amid scrutiny over allegations of profiting from issuing pardons. The posts appeared rushed, but one comment of note for markets was his renewed push to take Fannie Mae and Freddie Mac public. Importantly, Trump emphasised that the U.S. government would retain its implicit guarantees — a clarification not included in his previous remarks last week, when he said he was “seriously considering” taking the mortgage giants public.
From Tokyo, New York Fed President John Williams delivered remarks that suggest little appetite for rate cuts in the near term. He stressed that central banks must “respond relatively strongly” when inflation drifts from target, and warned against taking policy steps where the “cost of getting it wrong far outweighs the benefits,” especially given the high uncertainty around U.S. tariffs and trade policy.
Bank of Japan Governor Kazuo Ueda also spoke, flagging concern over recent volatility in Japan’s super-long bond yields. He noted that while shorter-term rates have more direct impact on economic growth, large swings in the long end could spill over and lift borrowing costs more broadly. Ueda added that fallout from US trade policy remains a significant source of uncertainty. That concern was reflected in the day’s 40-year JGB auction, which showed the weakest bid-to-cover ratio (2.2) since November and the softest demand since July.
Australia’s April monthly CPI came in a touch hotter than expected, with the headline holding steady at 2.4% y/y (vs 2.3% expected). The trimmed mean core measure rose to 2.8% y/y from 2.7% in March. While this is not the official quarterly inflation gauge used by the RBA — due in July — the data remains within the central bank’s 2–3% target band, keeping rate expectations finely balanced.
Across the Tasman, the Reserve Bank of New Zealand cut its official cash rate by 25 basis points to 3.25% in a 5–1 vote, as expected. The central bank now sees a slightly deeper easing path than it projected in February, with forecasts showing the cash rate at 2.92% in Q4 2025 and 2.85% in Q1 2026. The RBNZ warned that global uncertainties — particularly around U.S. trade policy — are expected to weigh on both international and domestic demand. NZD/USD moved higher in response and added further gains during Governor Hawkesby’s post-decision remarks, where he said policy is now in the “neutral zone” and not on a pre-set path.
The U.S. dollar strengthened modestly across the major pairs, extending Tuesday’s move — the New Zealand dollar being the notable exception.
This article was written by Eamonn Sheridan at www.forexlive.com.
