Good morning. In 1971, President Richard Nixon ended the U.S. dollar’s convertibility to gold, effectively killing the Bretton Woods system and giving birth to modern floating exchange rates.

That one decision created the forex market as we know it today.

-Jonathan Kibbler, Shaun A, Jordon Mellor

MARKETS

Prices supplied by Google Finance as of 4:00am ET - stock prices as of close. Here is what the prices mean.

TRADER INSIGHTS

The oil market has been fairly settled over the last month or so with the price trading between $70 and $65.50 but will the chop continue or will we see a break lower?

On that news, I would remain bearish in my sentiment on oil.

Non-commercial traders (hedge funds and large speculators) are now heavily net short oil, and are reaching levels similar to what we saw back in early July, right before prices reversed higher.

When positioning gets this extreme, the market is vulnerable to a sharp reversal. If we combine this with the fact that the US labor market data is weakening, pushing the Fed closer to rate cuts (USD negative, commodities positive), and Trump is threatening secondary sanctions on Russia (potential oil supply squeeze), it wouldn’t take much to spark a sharp short-term bounce in oil.

Right now, the short-term move in oil still leans bearish because of supply. But positioning suggests to me we could see this downside become short lived. If the price breaks the current lows around $65.50 and then reaches the key support of $57.50, I’ll be watching closely for a reversal signal. If the shorts start unwinding, oil could easily pop higher, catching a lot of traders off guard.

Trading Plan:

For now, I’m cautious but I’m not ignoring the risk of a reversal.

-Jonathan Kibbler

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NEWS

The drama around the future leadership of the U.S. Federal Reserve just got a plot twist, and traders are watching closely.

President Donald Trump revealed that Treasury Secretary Scott Bessent, once considered a front-runner to replace Jerome Powell, is out of the running for Fed Chair. This revelation lands just as Fed Governor Adriana Kugler announces her surprise resignation, effective this Friday, opening the door for Trump to further shape the Fed’s direction and potentially its rate path.

1. Bessent Steps Back But 4 Candidates Remain

In an interview on CNBC’s Squawk Box, Trump said Bessent told him he’s not interested in leading the Fed. “He wants to stay where he is,” Trump stated, adding that Bessent prefers to keep working alongside him. While Trump didn’t name names, he confirmed that four other candidates are still in play keeping markets guessing.

2. Kugler’s Resignation Creates Opening

Fed Governor Adriana Kugler’s exit gives Trump the chance to appoint another key ally to the Board of Governors and possibly tip the balance toward a more dovish, pro-cut stance as rate pressure builds. Kugler’s move was called a “pleasant surprise” by Trump, reinforcing that the White House sees an opportunity to steer monetary policy more directly.

3. The ‘Kevins’ Are Back on the Radar

Former Fed Governor Kevin Warsh and Trump advisor Kevin Hassett, both known for favoring lower interest rates, are rumored to be top contenders. Current Governor Christopher Waller, often aligned with Trump’s monetary views, is also reportedly in consideration. That’s three out of the four likely names and they all tilt dovish.

4. Powell’s Future Still in Question

While Jerome Powell’s term doesn’t end until May 2026, Trump’s repeated jabs at the current Chair have reignited chatter about a potential “shadow chair” someone who could act as a counterweight within the Fed. Trump hinted that it’s “a possibility,” though he hasn’t confirmed any such plan. Still, the market won’t ignore the political pressure.

5. Rate Cuts in September? Market Thinks So

The Fed kept rates steady last week at 4.25%–4.50%, but expectations for a September cut are climbing. Trump, who has accused the Fed of political bias for not cutting faster, claimed Powell once promised to keep rates low. Whether true or not, it’s clear the White House is gunning for looser policy and soon.

Trump’s Fed influence is rising again and the leadership race is more than politics; it’s market-moving. With Bessent stepping aside and Kugler exiting, the president has a chance to reshape the central bank just as the rate-cut debate heats up. Traders betting on September easing should keep one eye on the Fed calendar and the other on the West Wing.

-Shaun A

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ANSWER

Answer: Consumer Price Index (CPI)