Philadelphia Fed President Patrick Harker stated that he believes the Federal Reserve can maintain the current interest rates unless there's a significant shift in economic data.
Speaking at the Mortgage Bankers Association Annual Convention, Harker mentioned that the economic conditions are aligning with his expectations, with signs of disinflation, balanced labor markets, and continued economic resilience. He anticipates the GDP to grow through the end of the year and moderate in 2024, but doesn't foresee a recession. Harker predicts the unemployment rate to hover around 4% by the end of 2023, peaking at 4.5% in 2024, and then stabilizing around 4% in 2025. He emphasized the importance of considering both hard and soft data in monetary policy decisions and expressed his preference for a steady policy rate to ensure a stable economic trajectory.
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Today, the EURUSD currency pair is gaining, and the dollar remains one of the weaker currencies among developed countries. On the EURUSD chart, we see that the price has reached the 50% retracement level of the last Fibonacci wave that began in October 2022. The dollar, following recent more dovish comments from Fed members, has halted its gains and is currently stabilizing at high levels.
