Fed Bostic delivered a speech today in which he struck an upbeat note on the US economy, hinting that it still has a lot of momentum. Bostic said that he expects inflation to continue to drop. Speaking on rates, he said he does not expect the Fed to cut rates before mid-2024 but such a move could come in late-2024. However, his remarks did not trigger any major reaction on the USD market.
Key takeaways from Bostic speech:
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Create account Try a demo Download mobile app Download mobile app- Inflation has come down a lot and should continue to drop
- Economy has been resilient
- Businesses are bracing for a slowdown
- I don't think the Fed will cut rates before the middle of next year
- I don't know if the neutral rate has changed, it could be higher
- Late-2024 is possibly a time when the Fed would cut rates
- Economy still has a lot of momentum, inflation will ebb slowly
- Fed will need to be cautious, patient and resolute
- We are not going to see a recession
- Economy's long term trend is likely going the Fed's way
- Many business still have cash, blunting rise in market yields
- The deficit will become more of an issue as debt service increases
Taking a look at EURUSD at H1 interval, we can see that the pair has jumped today and once again tested short-term resistance zone in the 1.0595 area, marked with 23.6% retracement of a early-October upward move. However, bulls failed to break above it and a pullback was launched. The pair erased all of the previous daily gains and is now testing support zone in the 1.0570 area, marked with 38.2% retracement as well as the 200-hour moving average (purple line).
Source: xStation5
