Lisa Cook from the US Federal Reserve commented today US economy and inflation. Cook expects a bumpy path for US inflation in the short term but believes that price pressures will fall down across the economy to the 2% goal, as Fed policy is restrictive.
Fed Cook
- It is a good idea to pay attention to the distribution of Fed dots over the median.
- We know there are problems with commercial real estate, commercial real estate issues loom larger for smaller banks.
- It will be a challenge to push productivity beyond long-term average.
- There's ample evidence that monetary policy is restrictive.
- The Fed is watching the unemployment rate, but it's still at a low level.
- There's been a long-standing shortage of housing. It is defensible to include owner's equivalent rent in CPI.
- There are challenges measuring housing inflation. The financial system is not currently positioned to unusually amplify any future shock.
- Monthly job gains needed to keep the unemployment rate steady likely have doubled to nearly 200,000.
- I expect economic growth to remain near the rate of potential growth, somewhat above 2%
- Rising credit card and auto loan delinquencies are not yet concerning, but need watching.
- I lean toward optimism on innovation, productivity, allowing faster pace of non-inflationary growth.
- Progress on inflation has slowed, but I expect the disinflation trend to continue. The risks to achieving inflation and employment goals have moved toward better balance.
- The job market is tight but not overheated. Policy would also need to respond to sharper-than-expected weakening of the economy and the labour market.
- Inflation has slowed, and the labour market tightness has eased, but I am fully committed to 2% inflation target.
- Monetary policy is restrictive. The timing of any policy adjustment will depend on economic data and its implications for outlook and the balance of risks.
- I am very attentive to inflation expectations. A rise in inflation expectations would imply keeping monetary policy restrictive for longer.
- I expect 3 and 6 month inflation rates to move lower on a bumpy path. Current policy is well positioned to respond to economic outlook.
- I see 12-month inflation moving sideways for the rest of this year, and slowing more sharply next year. At some point, it will be appropriate to cut rates.
EURUSD (H1 interval)
The EURUSD pair loses today almost 0.25%, but the sell-off stopped at the 61.8 Fibonacci retracement level of the rising wave since 14 April.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile app
Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
