Two FED policymakers- Harker and George provided some comments regarding monetary policy during today's session. Neither of them showed any major changes with respect to their previous views on the economy.
Harker:
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Create account Try a demo Download mobile app Download mobile app- Reiterates support for 25 basis points hike at the next meeting
- He expects several rate hikes from the Fed this year
- Inflation will determine how high rates will be raised
- If the debt limit is not raised, the consequences can be very large
George:
- The Fed must be more patient in determining whether inflation is on a sustainable downward path
- Rates are not yet at a restrictive level
- Opted for holding rates once monetary policy is restrictive enough.
- Inflationary pressure will persist
- The labor market is extremely tight,would like to see fewer job openings.
- The economy is responding to what the Fed has done, the drop in inflation is encouraging
EURUSD slightly rebounded, although it is clear that this is related to lower US yields. EURUSD remains in consolidation and waits for a catalyst for a bigger move. Earlier, Lagarde stressed again that the ECB remains on a sharp tightening course, however her statement did not support the euro. At this point, further weakening of the US economy could put further pressure on the dollar.
EURUSD remains in consolidation as markets await the next meetings of two major central banks - Fed and ECB. Source: xStation5
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