Susan Collins, head of the Philadelphia Fed, shared with the market today her own view of the economy and the Fed's further tightening path. In principle, she confirmed the rather hawkish stance presented by Jerome Powell. EURUSD managed to erase some of the previous gains and Nasdaq (US100) contracts also retreated noticeably.
- I still believe that inflation can fall with only a moderate increase in unemployment, and I see a broader path to such an outcome. The economy is resilient thanks to which the road to a soft landing has widened.
- Current policy-making requires a lot of patience to get the right signal from incoming data
- Price pressures remain too high despite encouraging news from recent readings. Inflation is falling, but the progress of the decline is uneven.
- I support paying attention to inflation risks because persistent above-trend economic activity means it is too early to be confident that inflation will be beaten.
- Important aspects of inflation, such as basic services excluding rent, have yet to show sustained improvement.
- High rates are likely to reduce household and business demand. Further Fed increases are certainly not out of the question.
- I expect that interest rates may remain higher for quite some time. I fully support the Fed's 'dot plot' guidance.
USDIDX tests short-term support level at 105,02 pt (SMA200).
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Source: xStation5
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