The first day of Fed Chair Powell's semiannual testimonies in Congress turned out to be a non-event. Text of the testimony, which was released at 1:30 pm GMT, has largely repeated the message sent at the latest FOMC meeting - Fed needs more confidence that inflation is coming down before cutting rates, but will most likely cut rates this year. It was somewhat expected, given that macro data released since the last FOMC meeting did not show any major change in trends. Having said that, questions from lawmakers were the only potential source of volatility. Unfortunately, there were no surprises there either, with the majority of questions being politically-biased and lacking substance.
Below are key takeaways from the Q&A session at the House Financial Services Committee:
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Create account Try a demo Download mobile app Download mobile app- Number of cuts this year will depend on the path of the economy
- Have some confidence inflation is moving toward 2% target
- We would like to have more confidence on inflation, we have some confidence but want more
- Strength of the economy and labor market means we can approach decision to cut carefully and thoughtfully
- Forecast housing services inflation will come down
- Pandemic may have changed in a sustained way how we target inflation
- What we are seeing so far this year is continuation of solid growth and it should continue further
- There's no reason to think the economy is in or faces significant near-term risk of recession
- Inflation has come down sharply
- Commercial real estate risk is manageable
- We are very focused on AI
- Immigration and labor force participation both contributed to the strong economic growth that we had last year
US dollar has been weakening at a steady pace throughout Powell's testimony before the House Financial Services Committee today. EURUSD climbed above 1.09 mark for the first time since January 24, 2024.
Source: xStation5
