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4:32 PM · 3 March 2023

Fed semi-annual monetary policy report points to further rate hikes

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The Fed released its semi-annual monetary policy report today, and next week Powell will testify before Congress. His statement may provide some hints regarding future rate hike path and measures which may be taken during the March meeting. Highlights of the report:

Further hikes are needed

  • Financial conditions have tightened significantly since June

  • Service inflation excluding the housing sector remains elevated, further dynamics will depend on the labor market

  • Bringing inflation back to 2% likely requires period of below-trend growth, some softening of labor market conditions

  • Inflation abroad remains high, which has an impact on domestic prices

  • The labor market will remain strong for now

Today's report did not cause any major market moves, as next week's Powell semiannual testimonies is much more important. EURUSD rebounded slightly and the US100 remains at session highs.

Source: xStation5
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