Judging by the fact that fewer and fewer Fed officials are addressing the outlook for U.S. monetary policy in their remarks, it may well be that as early as tomorrow, during his speech, Fed Chair Jerome Powell could announce a pivot toward interest rate cuts — something the Trump administration has been anticipating.

Such a step, if taken, would be highly expected by financial markets, despite the Fed's persistent hawkish rhetoric in recent months stressing the need to continue fighting inflation. A sudden shift toward monetary easing would trigger a wave of speculation about how quickly and for how long rates might be cut.

On the one hand, lowering rates could stimulate economic growth, support the stock market, and ease the debt burden. On the other hand, it could spark a new round of inflation, weaken the dollar, and fuel bubbles in financial markets. The Trump administration would undoubtedly welcome rate cuts, as this aligns with its pro-growth policies. However, such a decision could be perceived as political pressure on the Fed, undermining the central bank's independence and setting a precedent for future interference.

Ultimately, Jerome Powell's speech may prove to be a defining moment for the U.S. economy and financial markets. Investors will be scrutinizing every word, seeking to discern the Fed's intentions and assess the consequences of this potential policy shift.

As for yesterday's remarks from Christopher Waller, he called for supporting the technological revolution unfolding in artificial intelligence and stablecoins as a way to stimulate the U.S. economy, although some critics may be skeptical of the hype. "The technologies available today may be new, but using innovative technology to create new payment services is not new," Waller said in prepared remarks at a blockchain symposium in Wyoming.

Waller has previously expressed support for certain aspects of decentralized finance, including technologies that underpin digital currencies complementing the traditional payment system, pointing to distributed ledger technology as offering more efficient and faster ways to track asset movements. On Wednesday, he stressed that the impact of DeFi on payments — including risk reduction — could be beneficial if the private sector and the Fed work together. "There is nothing scary about this, just because it takes place in the world of decentralized finance, or DeFi. It is simply a new technology for transferring objects and recording transactions," Waller said, adding that both the private and public sectors can apply innovations within their respective roles.

Waller stated that the Fed is studying the latest wave of innovations, including tokenization, smart contracts, and AI in payments, and is ready to continue advancing in this direction.

As for the current technical picture in EUR/USD, buyers now need to push through 1.1660. Only this will allow for a test of 1.1700. From there, the pair could climb toward 1.1730, but doing so without support from major players will be rather difficult. The ultimate target stands at the 1.1768 high. In case of a decline, I expect notable buyer activity around 1.1625. If no support emerges there, it may be best to wait for a retest of the 1.1600 low or consider long positions from 1.1565.

As for the current technical picture in GBP/USD, buyers need to break the nearest resistance at 1.3480. Only then will a move toward 1.3530 become possible, though breaking higher beyond that level will be quite difficult. The ultimate upside target lies around 1.3560. In case of a decline, the bears will attempt to regain control at 1.3440. If they succeed, a breakout of the range would deal a serious blow to the bulls' positions and push GBP/USD down to 1.3410, with prospects of reaching 1.3375.