Fed members comment on US economy & monetary policy 🏛️EURUSD gains 0,6%

Remarks from Federal Reserve Members

Schmid (Fed):

• “When making decisions on monetary policy, the Fed must carefully assess how much weight to give to soft data.”

• “In the coming years, the Fed must seriously consider how and when to use its balance sheet.”

• “Hopefully, the Fed is approaching a more stabilized, normalized yield curve.”

• “Nothing good happens when interest rates reach the zero lower bound. Cutting rates back to zero would likely mean we’re facing a crisis.”

Musalem (Fed):

• “The world after the pandemic is fundamentally different from what it was before. There’s at most a one-in-five chance that the Fed’s policy rate will approach zero again.”

• “GDP is close to its potential, the labor market is near full employment, and inflation remains above target.”

• “We can already see the footprint of AI investments reflected in GDP data.”

• “Business leaders are trying to figure out how to manage uncertainty around supply chains, inventories, and inflation.”

Goolsbee (Fed):

• “Interest rate cuts are still possible within a 10–16 month horizon.”

• “Despite volatility, I feel the economy’s fundamentals remain strong; if it weren’t for tariffs and uncertainty, rates could eventually come down.”

• “Interest rates are still within historical ranges. If a crisis over U.S. fiscal stability emerged, rates could move higher.”

• “Concerns about financial stability are currently overblown.”

• “If long-term yields are rising, that can directly impact real economic activity and would be factored into the Fed’s analysis.”

• “There is concern that the data are lagging, and upcoming reports may reveal more serious consequences from actions already taken.”

• “If tariffs result in a stagflationary effect, that would be the central bank’s worst-case scenario.”

• “In the short term, the Fed needs to wait for the dust to settle—the bar for taking action is higher until then.”

• “Firms are anxious that continued tariff announcements could disrupt supply chains and create upward pressure on prices.”

• “Tariffs at the 50% level would pose a serious threat to supply chains.”

• “A 50% tariff on the EU would be an entirely different magnitude than current conditions.”

• “Businesses are telling the Fed they want policy consistency before making major decisions – CNBC.”

EURUSD (H1 Timeframe)

The EURUSD pair has halted its rise at the 61.8% Fibonacci retracement level of the downward wave from the second half of April.

Source: xStation5