Fed Bowman and Janet Yellen comments on US economy 💵

Treasury Secretary and former Federal Reserve Chair Janet Yelen and Michelle Bowman of the Fed commented today on the US economy and the outlook for monetary policy. Although economists expect that yields on 10-year treasuries have already peaked this year, Bowman stressed that there is still a chance that rates will have to rise from current levels.

Fed Bowman

• Tighter financial conditions allow for a bit of patience but US interest rates may need further increases
• We are monitoring the effects of higher rates on banking sector risk
• Regulatory reform at banks may create risks to financial stability - at the moment these come mainly from companies operating outside the banking sector

Janet Yellen

• A soft landing for the U.S. economy is the most likely path, but attacks on Israel pose additional risks.
• While some countries are seeing a slowdown in growth, we see no signs of this weakness spreading widely, destabilizing the global economy. Global economy is in a better place than expected but we are monitoring this situation
• Risks to the current outlook primarily include global shocks but at this point we do not see attacks on Israel as having a significant impact on the economy. 
• We have not eased sanctions on Iranian oil in any way.  We seek a healthy economic relationship with China and cooperation on debt restructuring and global challenges.
• The squeeze on oil prices has significantly reduced Russia's profits over the past 10 months, while keeping energy markets stable
• We have worked very constructively with representatives of China's PBoC, and we are optimistic about continuing this work.
• I look forward to discussing debt issues with the PBoC chairman, the development of the economy has been slow so far, but we have seen some positive developments

USDIDX chart (H1)

Dollar Index (USDIDX) contracts are trading with little volatility today, gaining 0.04%. The SMA100 average has crossed the SMA200 from above, forming a 'death cross' formation - If we look back, similar formations (red rectangles) preceded periods of slightly longer dollar weakness (which, of course, does not determine that the situation will be similar this time. The main support level is located at 105.2 (the 38.2 Fibonacci retracement of the upward wave from July this year).

Source: xStation5