Hawkish comments from Barkin and Logan 📣

Dallas Fed President, Lorie K. Logan

Logan's comments were particularly hawkish. The banker believes it is "definitely too early" to consider cutting interest rates and emphasized the need for more certainty about the economy's trajectory and inflation before making such decisions. Logan noted that there is a risk of inflation rebounding, which could turn out to be more “sticky”. The banker highlighted that the FOMC should be ready to respond appropriately if inflation data turns out to be higher than expected, and the downward momentum halts. In such a scenario, this could even mean a return to further interest rate hikes. Lorie K. Logan expressed herself in an exceptionally hawkish manner, though this tone has been maintained for some time.

Richmond Fed President, Thomas Barkin

Barkin commented on today's labor market data, describing the report as quite strong. The banker emphasized the strength in the labor market, noting the constant low unemployment rate, a situation not seen since the late 1960s. He also mentioned that employers are refraining from laying off workers despite signs of moderate consumption, likely influenced by experiences with the tight labor market during the early pandemic. Barkin also noted that inflation might be harder to defeat and bring down to the 2.00% target.

USDIDX

After today's NFP report, the dollar index significantly gained, breaking above the 104-point level. Despite the strong move, which was sustained after the publication, we currently see a reversal and a partial erasing of the gains. The lower limit remains at the 104.000-point level and further at 103.500. On the other hand, in the upward direction, bulls face resistance around 104.800 points.

Source: xStation 5