Investors were offered comments from 2 Fed members this afternoon - Philadelphia Fed chief Harker and Richmond Fed chief Barkin. Harker has been rather dovish in his remarks, suggesting that rates may be left unchanged at September meeting. Meanwhile, Barkin spoke more on the economy and was reluctant to say where he sees rates in September. Nevertheless, he stressed that inflation still remains too high.
Fed Harker
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Create account Try a demo Download mobile app Download mobile app- Fiscal stimulus is burning off
- Supply chain issues are starting to heal
- Our forecast is not that inflation might spike back up
- I see core PCE declining to just below 4% by the end of 2023, below 3% in 2024 and at 2% in 2025
- Barring alarming new data by mid-September, I believe we may be at the point where we can be patient and hold rates steady
Fed Barkin
- Inflation remains too high
- GDP remains solid and labor market is 'remarkably resilient'
- Workforce is still the number one issue for US companies
- There is still time before the next meeting to see how economy and inflation are behaving
- I don't want to predeclare where rates are going to go
Comments from US central bankers, however, did little to change situation on EURUSD. The pair continues to move lower, breaking below the 1.0950 support zone today. EURUSD is currently testing local lows from Friday but given that the pair failed to break above the upper limit of the local market geometry, thus confirming ongoing downtrend, a move to a fresh local low cannot be ruled out.
EURUSD at H1 interval. Source: xStation5
