One day after St Louis Fed president James Bullard opened the door for the "patient" Fed to start cutting rates and sending yields and the dollar sliding, moments ago the Fed Chair doubled down on dovishness when in a speech delivered to the Chicago Fed, Powell confirmed the Fed's openness to cut interest rates if necessary, stating that the Fed's unconventional tools are now conventional and will "likely be needed in some form in the future" as he pledged to keep a close watch on the escalating trade war between the US and some of the world's largest economies.

Sparking a renewed dovish kneejerk reaction was Powell's flashing red headline that the Fed will "act as appropriate" to sustain the expansion, while affirming the the Fed is closely monitoring implications of trade negotiations for the US economic outlook as the "Fed does not know how or when trade issues will be resolved." Here is the key segment from his speech:

 "I'd like first to say a word about recent developments involving trade negotiations and other matters. We do not know how or when these issues will be resolved. We are closely monitoring the implications of these developments for the U.S. economic outlook and, as always, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2 percent objective."