Thomas Barkin, head of Richmond Fed, as well as Loretta Mester from Cleveland Fed commented on the monetary policy and economy today. EURUSD moved lower during their speeches but the move can be better explained with release of better-than-expected US data, like retail sales or industrial production for April. Nevertheless, they both sounded somewhat hawkish.
Barkin
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Create account Try a demo Download mobile app Download mobile app- There are expectations for an economic slowdown in the coming quarters
- Jobs market remains tight and have not cooled down in-line with expectations
- Demand is cooling but not yet cold
- Expects his unemployment rate forecast to come down a bit
- Commercial real estate is not an unknown vulnerability but it is one I am focused on
- Commercial office sector is where you hear the most concern on commercial real estate
- There is a lot of data until June FOMC meeting as well as still unresolved debt ceiling issue
- Number 1 lesson from 1970s is don't quit too soon
- If more increases are needed to bring down inflation, then I am comfortable with that
Mester
- Appropriate monetary policy will ensure drop in inflation. Significant progress on inflation is expected this year
- Personal expectations are that economic growth will be significantly below-trend
- Wants to assess how much credit conditions will tighten
EURUSD attempts to hold above 1.0870 handle, near 38.2% retracement of the upward impulse launched on March 10, 2023. A drop below may pave the way for a test of the 61.8% retracement in the 1.0730 area. Source: xStation5
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