While the dollar finds new reasons to decline each day—and sellers are met daily with a barrier preventing a deeper sell-off—former Treasury Secretary Lawrence Summers criticized the first speech of Stephen Miran as Chair of the Federal Reserve, stating that it failed to provide an adequate analytical basis for a sharp reduction in interest rates.

"I cannot recall a weaker analytical speech delivered before the New York Economic Club or by a Fed Chair," Summers said. "If this was the best argument in favor of the radical interest rate cuts supported by President Trump, then it is even weaker than I previously thought."

Summers's remarks, carrying significant weight in economic circles, came as a thunderclap, casting doubt not only on Miran's competence but also on the justification for a decision that could have long-term consequences for the U.S. economy. His reasoning was based on the lack of a clear link between the current state of the economy and the proposed rate cuts. He stressed that economic indicators, contrary to expectations, still point to persistent inflation and a relatively stable labor market, which in his view do not justify such an aggressive move. Summers expressed concern that an ill-considered rate cut could overheat the economy, trigger another inflationary spiral, and ultimately require even harsher regulatory measures in the future.

Miran, who served as chief White House economist under President Donald Trump before moving to the Fed ahead of the September 17 rate decision, spoke last week about the so-called neutral interest rate. This is a theoretical situation in which policy neither stimulates nor restrains inflation and the labor market. He argued that Trump's policies had lowered it, leaving the Fed's current stance excessively tight. The new Fed Board member, who advocated for a deeper rate cut in his September 17 speech, concluded that the policy target is currently about 2 percentage points too high.

Summers, a Harvard professor, praised Miran for emphasizing the neutral rate. In his view, current Chair Jerome Powell and other policymakers have long downplayed the value of discussing the neutral rate when making real-time decisions. "Miran was right to say that analysis of the neutral interest rate is essential for consistent thinking on monetary policy. However, I must say I was very disappointed by the quality of his analysis," Summers said.

Summers also highlighted Trump's trade policy aimed at reducing the U.S. trade deficit, which reduces the supply of dollars available for foreigners to invest in the U.S. capital markets. In his view, cutting the flow of funds into the U.S. puts downward pressure on the neutral interest rate.

Summers's interview caused no reaction in the currency market.

As for the current EUR/USD technical outlook, buyers now need to break above 1.1745. Only this would allow them to target a test of 1.1790. From there, a climb to 1.1820 becomes possible, but achieving this without strong support from major players will be difficult. The ultimate target stands at the 1.1845 high. If the instrument falls toward 1.1710, I expect major buyers to step in. If none appear, it would be preferable to wait for a retest of the 1.1680 low or to consider long positions from 1.1650.

As for the current GBP/USD technical picture, pound buyers need to overcome the nearest resistance at 1.3490. Only this would open the way toward 1.3530, a level that will be hard to break. The ultimate target lies at 1.3565. If the pair declines, bears will attempt to regain control of 1.3440. A break below this range would seriously damage bull positions and push GBP/USD toward the 1.3400 low, with prospects of reaching 1.3365.