Dollar Wavers on Weak U.S. Data and Trade Stalemate Ahead of Jobs Report

Economic

Forex

Summary:

The U.S. dollar is on track for a weekly decline as market sentiment sours amid weak economic indicators, unclear trade negotiations, and anticipation over Friday’s nonfarm payrolls data...

U.S. Economic Softness Erodes Dollar Confidence

The dollar has spent the week under pressure, dragged by disappointing U.S. economic data and intensifying fears of stagflation. From declining private payrolls to a surge in layoffs, the indicators paint a picture of a labor market losing steam under the strain of President Trump’s tariff policies and fiscal uncertainty.

These signals have revived concerns that the U.S. Federal Reserve may be forced to cut interest rates sooner than previously expected, undermining the dollar’s attractiveness. Friday’s nonfarm payrolls report is expected to show a modest gain of 130,000 jobs and an unemployment rate holding at 4.2%, though any downside surprise—such as a rise to 4.3%—could accelerate bearish sentiment.

Ray Attrill of National Australia Bank suggests the recent string of weak data may be more impactful than political developments, stating that as the perception of U.S. economic “exceptionalism” fades, pressure will build on the dollar through the labor market channel.

Geopolitical Uncertainty Compounds Market Caution

Adding to the dollar’s woes is the absence of progress in U.S. trade negotiations. The much-hyped call between President Trump and Chinese President Xi Jinping failed to produce concrete results, offering little relief to investors awaiting resolution before the early July deadline.

Moreover, market focus was derailed by the unexpected public feud between Trump and Elon Musk, which not only rattled tech stocks like Tesla but also distracted from broader trade discussions. This unusual political theater injects additional uncertainty into an already fragile macroeconomic backdrop.

Euro Supported by Hawkish ECB, Sterling and Antipodeans Gain

In contrast, the euro strengthened to a six-week high of $1.1495 after the European Central Bank, despite cutting rates, struck a hawkish tone on future easing. The ECB’s signaling of only one additional rate cut—likely in September—has bolstered the euro’s relative appeal, especially as traders reassess their outlook on terminal rates.

Sterling also gained, reaching $1.3583, its highest in over three years. It is poised for a 0.9% weekly rise, helped by signs of resilience in the UK economy and some USD softness. Meanwhile, the Australian and New Zealand dollars have each appreciated by over 1% this week, supported by improving risk sentiment and expectations of stable monetary policy in the region.

Dollar Index and Outlook

The U.S. Dollar Index (DXY) stood at 98.72 on Friday, near a six-week low, and on track for a 0.7% weekly loss. This reflects broad skepticism over near-term U.S. economic prospects and declining confidence in the Fed’s ability to maintain tight policy without harming growth.

If the jobs report confirms labor market weakness, expectations of a September rate cut may solidify, weakening the dollar further. Conversely, a positive surprise could stabilize the greenback, although geopolitical risks and fiscal tensions remain formidable headwinds.

With economic indicators faltering and political risks mounting, the dollar’s trajectory remains highly sensitive to upcoming labor data. The global currency market is entering a phase of elevated volatility, with the dollar’s safe-haven status increasingly challenged by internal fragilities and external uncertainties. Investors and policymakers alike await Friday's figures for the next cue in this increasingly unpredictable economic landscape.

Source: Reuters

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Economic

Political

The Collapse of a Political Partnership

The fallout between President Trump and Elon Musk represents more than a social media spat—it marks the implosion of a powerful nexus between politics and business. What began as a strategic alliance during the 2024 campaign, with Musk playing the role of influential adviser and megadonor, has devolved into acrimony. At the heart of the conflict lies Trump’s controversial “Big, Beautiful Bill”—a sweeping tax-and-spend package Musk publicly condemned as fiscally reckless.

Trump, who had previously celebrated Musk's efforts to downsize federal bureaucracy through the Department of Government Efficiency, now accuses the billionaire of betrayal. In retaliation, Trump threatened to terminate federal contracts with Musk's companies—Tesla, SpaceX, and Starlink. This threat triggered a historic 14.3% plunge in Tesla shares, wiping out $150 billion in market value and delivering Musk one of the largest single-day wealth losses in Bloomberg’s recorded history.

Musk Strikes Back—Impeachment and Exit Threats

In a series of rapid-fire posts on X, Musk lashed out, suggesting Trump should be impeached and accusing the president of ingratitude. He claimed Trump “would have lost” the 2024 election without his financial and social media backing. He further attacked the administration’s fiscal irresponsibility, labeling the bill a “disgusting abomination” and stoking divisions within the Republican Party.

In a provocative move, Musk initially announced the decommissioning of SpaceX’s Dragon spacecraft—a linchpin in NASA’s space logistics—and later reversed it. His fluctuating stance signaled both his defiance and the recognition of potential long-term damage to his government-dependent enterprises.

Market Fallout and Strategic Risks

The feud's economic implications are broad. Markets responded swiftly and negatively. Beyond Tesla's plunge, investor concerns are rising over Musk's divided focus between politics and business, especially as protests over his political conduct impact Tesla sales in both the U.S. and Europe.

Analysts note that the loss of EV tax credits, embedded in Trump’s bill, could significantly harm Tesla’s profit outlook—estimated at a $1.2 billion hit. More critically, any interruption to SpaceX’s government contracts could undermine national space missions, giving the feud geopolitical weight.

Musk’s counteroffensive includes leveraging his massive social media base to float the idea of forming a centrist political party. While perhaps symbolic, the move reflects the broader disillusionment with polarized U.S. politics and suggests Musk's ambition to reshape the political landscape beyond his role as a business magnate.

Implications for the Republican Party and U.S. Governance

This political rupture carries strategic risks for the Republican Party ahead of midterm elections. Musk's exit from Trump’s orbit could weaken Silicon Valley donor networks and alienate moderate voters. Having served as a bridge between the tech elite and conservative policymaking, Musk’s split with Trump could fragment the GOP’s funding base and policy consensus.

Trump, accustomed to inner-circle purges, may weather the clash politically—but losing Musk could prove more damaging than past breakups. Musk is not just a donor or figurehead; he controls key industries tied to defense, transportation, and innovation. His economic footprint, coupled with his digital reach, makes this fallout uniquely consequential.

What once appeared to be a symbiotic alliance has now become a cautionary tale of ego, influence, and ideological divergence. The Trump-Musk feud is not merely personal; it has become a flashpoint for deeper tensions between government and the tech elite. As both sides escalate rhetoric, the consequences could reshape political alliances, legislative agendas, and even the trajectory of American innovation. Investors, lawmakers, and the global public will be watching closely—not just for reconciliation, but for the broader systemic implications of this high-stakes showdown.

Source: Reuters

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Economic

A Rare Nudge: U.S. Pressures Japan on Monetary Policy

In an uncommon public push, the U.S. Treasury Department’s latest exchange-rate report to Congress recommended that the Bank of Japan continue its gradual exit from ultra-loose monetary policy. The Treasury emphasized that such tightening would help normalize the yen’s undervaluation and address long-standing trade imbalances between the two economies. This comment marks a shift in tone from Washington, which historically refrained from overt suggestions on BOJ’s stance.

The recommendation reflects U.S. frustration with Japan's persistently low interest rates, which have contributed to the yen's extended weakness against the dollar. With the yen trading near multi-decade lows, U.S. exporters face rising disadvantages in price competitiveness, particularly in sectors like autos and machinery. By encouraging further rate hikes, Washington aims to foster a more balanced bilateral trade framework while also subtly addressing perceived currency undervaluation.

BOJ's Cautious Path Amid Global Pressures

The BOJ raised short-term interest rates for the first time in years back in January 2025, lifting them to 0.5%, after declaring that Japan was finally close to consistently reaching its 2% inflation target. However, economic headwinds—particularly from Trump's renewed trade tariffs—forced the central bank to revise growth forecasts downward in May. This has led policymakers to remain cautious about further tightening, prioritizing growth support over aggressive normalization.

Market sentiment suggests skepticism about the pace of additional hikes. A Reuters poll conducted in mid-May revealed that most economists expect the BOJ to hold rates through September, with only a slim majority predicting a further increase by year-end. This disconnect between U.S. expectations and BOJ’s cautious stance could fuel future diplomatic tensions, especially if currency misalignments persist.

FX Manipulation Monitoring and Pension Fund Comments

While the Treasury did not label any major trading partner as a currency manipulator in 2024, Japan was again placed on the monitoring list alongside China, South Korea, Taiwan, and others. The report also included a pointed comment on Japan’s public pension funds, stressing that foreign investments should be based on risk-adjusted returns and not driven by exchange rate objectives. This appears to be a preemptive warning against any perceived “stealth” currency support through capital allocations.

Japanese Finance Minister Katsunobu Kato responded cautiously, underscoring the independence of the BOJ and affirming that pension fund investments are made solely for diversification and return purposes—not to influence exchange rates.

The U.S. Treasury’s comments reflect broader concerns about global currency imbalances in a time of rising protectionism and volatile trade relationships. For Japan, the challenge is to navigate a delicate balance: supporting a fragile economic recovery while responding to international pressure for rate normalization. For the global economy, how Tokyo reacts could have ripple effects, not only for yen stability but also for regional capital flows and inflation dynamics. As U.S. trade policy continues to evolve under Trump, Japan’s monetary trajectory will remain a geopolitical and financial focal point through the rest of 2025.

Source: Reuters

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FastBull Featured

Daily News

[Quick Facts]

1. Japanese household spending declined in April unexpectedly.

2. Canada's April goods trade deficit hits record high of CAD 7.1 billion.

3. U.S. aluminum premium hits record high.

4. US vetoes UN Security Council demand for Gaza ceasefire; Iran strongly condemns.

5. U.S. Challenger companies see a surge in job cuts.

6. Divided views among U.S. Cabinet Officials leave Japan in the dark on Trade Talks.

7. Harker: economic outlook too uncertain to make policy prediction.

8. Schmid: Unwilling to underestimate tariff-driven price gains.

9. ECB cuts rates by 25 basis points but may pause in July.

[News Details]

Japanese household spending declined in April unexpectedly

Japanese household spending unexpectedly fell in April as consumers tightened their purse strings amid rising prices. Data released by Japan's Ministry of Internal Affairs and Communications on Friday showed that household spending in April dropped 0.1% year-on-year, below the median market forecast of a 1.4% increase and down from a 2.1% rise in March. Seasonally adjusted household spending in April decreased by 1.8% month-on-month, compared with an estimated 0.8% decline. Consumption and wage trends are among the key factors the Bank of Japan (BOJ) uses to assess economic strength and decide when to raise interest rates. Substantial wage hikes are seen as a necessary measure to help households cope with a sharp rise in living costs. At the annual spring wage negotiations held in March, large Japanese companies agreed on average to raise wages by more than 5%.

Monthly wage data released on Thursday showed that Japan's real wages fell for the fourth consecutive month in April, as stubborn inflation continued to outpace companies' wage increases so far. Looking ahead, Japanese policymakers and analysts are concerned that global trade tensions triggered by U.S. tariffs could weaken the momentum of wage growth and complicate the BOJ's efforts to normalize monetary policy.

Canada's April goods trade deficit hits record high of CAD 7.1 billion

On May 5th (local time), data from Statistics Canada showed that Canada's goods trade deficit surged from CAD 2.3 billion in March to CAD 7.1 billion in April, the largest recorded deficit. Data indicated a decline of 10.8% of domestic exports to CAD 60.4 billion, the lowest level since June 2023 with significant declines in sectors such as automotive and parts, consumer goods, and energy products. Total imports in April dropped 3.5% to CAD 67.6 billion, with imports of automotive and parts, industrial machinery and equipment and parts, consumer goods, and electronic and electrical equipment and parts all seeing sharp decreases.

U.S. aluminum premium hits record high

According to foreign media reports, the premium U.S. consumers pay for aluminum in the spot market hit a record high of 60 cents per pound (or $1,323 per ton) on Thursday, following the U.S.'s imposition of higher tariffs on imported aluminum. The aluminum premium in the U.S. Midwest has surged by nearly 190% since November last year. When U.S. consumers buy aluminum in the spot market, they typically pay the London Metal Exchange (LME) benchmark price plus a premium to cover costs including transportation and taxes. The U.S. heavily relies on aluminum imports, with the vast majority coming from Canada.

US vetoes UN Security Council demand for Gaza ceasefire; Iran strongly condemns

The UN Security Council failed to adopt a resolution calling for an immediate ceasefire and an end to the genocide in Gaza. In response, Iranian Foreign Ministry Spokesman Nasser Kanaani described on June 5th that the U.S. government's veto of the resolution is continued complicity in the crimes of the Israeli regime and strongly condemned the move. Kanaani noted that the resolution was supported by 14 of the 15 Security Council member states, with only the U.S. voting against it. He stated that the U.S. government's veto of the resolution, aimed at pressuring the Israeli regime to halt the Gaza genocide, not only constitutes a clear rejection by the international community and the people of the region to end Israel's crimes but also reflects the moral bankruptcy of U.S. policymakers and serves as evidence of their involvement and complicity in the massacres in Palestine.

U.S. Challenger companies see a surge in job cuts

The Challenger report revealed that U.S. employers announced 93,816 job cuts in May, a 12% decrease from April's 105,441 but a 47% increase compared to the same period last year (63,816). Andrew Challenger, senior vice president of the firm, stated, "Tariffs, funding cuts, consumer spending, and overall economic pessimism are putting intense pressure on companies' workforces. Companies are spending less, slowing hiring, and sending layoff notices." From January to May this year, employers have announced 696,309 job cuts, an 80% increase from the 385,859 cuts announced in the first five months of last year. This figure is still 65,049 short of the total announced for the full year of 2024.

Divided views among U.S. Cabinet Officials leave Japan in the dark on Trade Talks

According to Nikkei News, reliable sources revealed that tariff negotiations between the U.S. and Japan have been complicated by the involvement of three senior U.S. officials with differing views on trade. Public disagreements, competition, and chaos among U.S. Treasury Secretary Bessent, Commerce Secretary Lutnick, and Trade Representative Greer have made it difficult for Japanese negotiators to discern the true stance of the Trump administration.

One source noted that during a recent meeting, the three cabinet officials temporarily paused talks with Japan and began debating in front of their Japanese counterparts. Another source close to the Japanese government stated, "These three officials are competing for credit," speculating that this may be an attempt to curry favor with U.S. President Trump. The insider added that the three sometimes pressure Japan separately to make concessions. A senior Japanese economic official commented, "In the current talks, there is a disconnect between the working level, cabinet officials, and the president in the U.S., with no apparent sharing of information."

Harker: economic outlook too uncertain to make policy prediction

Patrick Harker, President of the Federal Reserve Bank of Philadelphia, stated in his final speech as a central banker on Thursday that predicting the future has become difficult due to changing economic policies and priorities in Washington, whose ultimate impact on inflation and employment remains unclear. He emphasized the need to "wait and see" how the economy performs before deciding whether to adjust monetary policy. The data received could lead to multiple economic scenarios, and only time will provide the necessary clarity.

This outlook could place the Fed in a challenging position, requiring it to decide which aspect of its dual mandate: employment and inflation, to prioritize.

Schmid: Unwilling to underestimate tariff-driven price gains

Kansas City Federal Reserve Bank President Schmid noted in a speech on Thursday that tariffs could reignite inflation, with price pressures likely to surface in the coming months, though their full impact may not be fully felt for some time.

While in theory, monetary policy should ignore one-off price increases, he was reluctant to bet the Fed's reputation and credibility on the correctness of this theory. Despite widespread belief that tariffs would slow economic growth and weaken the labor market, he remained "optimistic" about the momentum of economic growth.

ECB cuts rates by 25 basis points but may pause in July

After a monetary policy meeting on Friday, ECB President Christine Lagarde stated that while the ECB's decision to cut three key interest rates by 25 basis points that day marked a new phase in the current monetary policy cycle, future interest rate moves will depend on economic data. The ECB will remain flexible in responding to changing circumstances, continue to pursue its price stability mandate steadfastly, and will not pre-commit to a policy path.

Reliable sources revealed that ECB officials expect to pause rate cuts at their next policy meeting in July. Given the uncertainty surrounding U.S. President Donald Trump's tariff policies, the most likely scenario is a pause after eight rounds of borrowing cost cuts. The sources declined to be named as the discussions were confidential. Some officials believe the cuts to borrowing costs may end, while others still support another rate cut, with a pause possibly coming in September. They emphasized that policymakers' views could still shift as the July 9th deadline for U.S.-EU trade talks approaches.

[Today's Focus]

UTC+8 14:00 Germany’s April seasonally adjusted exports (MoM)

UTC+8 16:00 Speech by ECB Governing Council Member Holzmann

UTC+8 17:00 Eurozone April retail sales (MoM)

UTC+8 20:30 U.S. May Nonfarm Payrolls

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Stocks

Economic

Market Tension Builds Ahead of U.S. Jobs Report

Financial markets entered Friday cautiously, as investors braced for the release of U.S. nonfarm payrolls data—a critical gauge of economic health. Soft macroeconomic indicators throughout the week have sharpened fears that the labor market may be weakening, potentially exacerbating stagflation risks.

Analysts expect a modest 130,000 job gain in May with unemployment holding at 4.2%. However, a string of downbeat figures—including a 47% year-on-year rise in Challenger layoffs and a weaker-than-expected ADP payroll report—has some predicting even lower job creation. TD Securities forecasts just 110,000 new jobs, warning that any downside surprise could accelerate speculation of a September rate cut by the Federal Reserve.

Treasury yields reflect this wait-and-see posture. The 10-year yield held steady around 4.39%, having rebounded slightly from a one-month low. Futures markets are pricing in a 93% probability of a Fed cut by September, with a second move likely in December.

Tesla's $150 Billion Wipeout Amid Trump Threats

Tesla’s steep 14% loss on Thursday, the largest single-day drop in years, was triggered not by financials but politics. Once allies, Donald Trump and Elon Musk are now at odds, with the U.S. president threatening to pull federal contracts from Musk-led companies. Though Tesla shares recovered 0.8% in after-hours trading, the damage—$150 billion in market value—reflects investor unease about escalating political risk.

This feud represents a significant shift in the political-business landscape, potentially affecting government procurement, clean energy initiatives, and Musk’s broader influence in Washington.

Asia Mixed as Trade Optimism Fades

Asian markets traded sideways despite a 2.2% weekly gain in MSCI’s Asia-Pacific ex-Japan index. Japan’s Nikkei rose 0.3% on the day but is still down 0.7% for the week. South Korea’s markets remained closed, though President Lee Jae-myung’s economic stimulus plans helped drive a 4.2% weekly surge in the KOSPI and a 2% rise in the won.

China’s markets were less optimistic. While a call between Trump and Xi Jinping suggested some willingness to de-escalate tensions, investors remain skeptical about a comprehensive trade deal before the August 14 deadline. Hong Kong’s Hang Seng fell 0.3% and mainland Chinese blue chips were flat, reflecting persistent uncertainty.

Commodities: Oil Stable, Gold Reclaims Luster

Crude oil prices remained steady but were on track for weekly gains, supported by resumed U.S.-China trade talks and supply-side concerns. U.S. WTI hovered around $65.29 a barrel, up 2.1% for the week, while Brent is trading similarly firm. Output disruptions in Canada and cautious OPEC+ supply management continue to provide a floor under prices.

Gold rose 0.3% to $3,362 an ounce, extending its weekly gain to 2.2%. A weaker dollar—down 0.7% this week—helped boost safe-haven demand amid market jitters.

Markets face a critical inflection point heading into Friday’s U.S. payrolls release. The Trump-Musk feud adds an unpredictable layer of risk to an already volatile environment marked by trade policy shifts and economic softness. Investors will be closely watching how labor data reshapes the Fed’s policy outlook, particularly as the threat of stagflation looms large over global sentiment.

Source: Reuters

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Economic

An Explosive Rift With Historic Financial Fallout

Elon Musk’s net worth plunged by $34 billion on Thursday—his second-worst single-day loss ever—following a dramatic and very public dispute with U.S. President Donald Trump. The spat not only shook investor confidence but exposed the fragility of business-government relations in a hyper-politicized environment. Musk remains the world’s richest man with $334.5 billion, but the scale and context of this loss signal deeper structural risks for his companies and market perception.

The clash was ignited by Musk's criticism of Trump’s “Big, Beautiful Bill,” a government spending package that Musk claimed would balloon the national deficit and undermine innovation. Trump's retaliatory threat to cut federal contracts—particularly those critical to Tesla and SpaceX—triggered Tesla’s 14% stock dive and investor concern about future revenues.

Tesla’s Identity Crisis and Political Entanglement

Tesla’s downfall is more than a stock correction; it signals a growing brand and market disconnect. Once the darling of eco-conscious consumers, Tesla’s alignment with Trump-era policies has alienated parts of its original liberal base. With Trump now turning on Musk, Tesla risks political isolation on both ends of the ideological spectrum.

JPMorgan estimates that the bill in question could slash $1.2 billion from Tesla’s 2025 profits, largely due to the potential elimination of electric vehicle tax credits. Compounded by Musk’s unpredictable behavior—like suggesting SpaceX would decommission its Dragon spacecraft only to reverse hours later—investor confidence in governance is waning.

Private Empire at Risk: SpaceX, Neuralink, xAI

Musk’s wealth is increasingly tied to his private ventures: SpaceX, Neuralink, and xAI Holdings. SpaceX alone is valued at $350 billion, and its fortunes are closely linked to government contracts. Since 2000, Tesla and SpaceX have received $22.5 billion in U.S. government contracts, and Trump’s threats jeopardize future inflows. Even Neuralink, freshly valued at $9 billion, may face regulatory pressures if tensions escalate further.

Musk’s counterattack—implying Trump’s name is in Epstein-related files and calling the bill an “abomination”—only intensified the hostilities. His proposal to form a centrist political party underscores a widening ideological rift and suggests he may pursue a more aggressive political identity independent of traditional parties.

Strategic Implications: Market Volatility and Political Risk

This feud introduces a new class of market risk: personal political fallout. While Musk has weathered previous volatility, this episode is unique in that it combines policy threats, consumer perception shifts, and the vulnerability of federal dependence. Investors will closely monitor Tesla’s stock performance, SpaceX’s contract flow, and whether this political rupture spills into broader regulatory scrutiny.

With Tesla’s valuation now under stress and Musk’s private holdings exposed to retaliatory measures, the feud underscores how political alliances can become financial liabilities when trust breaks down.

Musk’s $34 billion wealth wipeout is more than a headline—it’s a cautionary tale about overexposure to political capital. As Trump hardens his stance and Musk amplifies his defiance, both the markets and U.S. technological leadership face increasing uncertainty. Whether this rivalry resolves or deepens, its impact will ripple through business, politics, and investor psychology in the months ahead.

Source: Bloomberg

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Economic

Commodity

Trade Talks Rekindle Hopes for Demand Recovery

Oil markets responded positively this week to news that U.S. President Donald Trump and Chinese President Xi Jinping had resumed trade discussions. Initiated at Washington’s request and described by Trump as having a “very positive conclusion,” the talks signal a potential easing of tensions between the world’s two largest economies. With both nations being major consumers of oil, any reduction in tariff-driven uncertainty boosts market expectations for future energy demand.

Brent crude has advanced approximately 2.1% this week to $65.22 per barrel, while West Texas Intermediate (WTI) has gained 4% to $63.22, reflecting the strongest week in nearly a month for both contracts. Despite Friday morning’s slight declines—0.2% for each benchmark—the broader market trend remains upward.

Canada's Wildfires and Output Cuts Add Upward Pressure

Supply-side constraints also played a key role in this week’s oil price recovery. Canadian output disruptions due to wildfires have tightened North American supply, supporting WTI in particular. Meanwhile, Saudi Arabia’s modest price reduction for July crude shipments to Asia—less than market expectations—has tempered concerns of a flood in supply following OPEC+’s agreement to raise output by 411,000 barrels per day starting in July.

Saudi Arabia’s reluctance to deepen discounts suggests a calibrated approach aimed at maintaining market stability while reasserting control over production quotas within the OPEC+ alliance.

Weak U.S. Economic Data Limits Upside Momentum

Despite these bullish catalysts, macroeconomic indicators in the U.S. have capped further price increases. The services sector contracted in May for the first time in nearly a year, and weekly jobless claims continued to rise, signaling a slowing labor market. These data points increase speculation that the Federal Reserve may consider pausing or even reversing its current interest rate path, which would have implications for oil demand and broader economic momentum.

Market participants are now closely watching the U.S. nonfarm payrolls report due Friday, which could provide further clarity on Fed policy direction and, by extension, investor sentiment in the commodities market.

The rebound in oil prices this week reflects a delicate balance of geopolitical dialogue, production dynamics, and economic indicators. While trade negotiations between Washington and Beijing have restored some optimism, the sustainability of the rally hinges on concrete policy outcomes and stronger macroeconomic signals. Investors remain cautiously optimistic, but with volatility tied closely to headlines and central bank signals, oil's near-term trajectory remains data-dependent.