Dollar Rises on Mideast Risks; CPI, Warsh Next

This week’s focus turns to the June CPI report and Kevin Warsh’s testimony before Congress. Warsh moved markets twice before: at his first FOMC meeting he said the Fed would do whatever it takes to bring inflation down, lifting the dollar. In Sintra, his comments on progress against inflation weakened the currency.

The CPI is expected to fall 0.1% month-on-month, the first decline since the pandemic. Core inflation is seen accelerating to 0.3% from 0.2%. The mix will determine whether the dollar extends its gains or gives some back.

Gold slipped toward $4,000 an ounce. Real 10-year Treasury yields are at their highest in over a year, and the dollar’s strength plus the higher odds of tighter policy added pressure.