USD: Powell: More Time Needed for Restrictive Policy
US FED Chairman Jerome Powell said at Economic trends meeting, US Economy is doing good and robust in all sectors. Wage pressures are higher and Job growth is good. Inflation is not come to our target this year due to current circumstances. So Restrictive monetary policy sustained in this year. Hawkish comments from FED Powell moved US Dollar higher against Counter pairs.
USD Index is moving in box pattern and market has reached resistance area of the pattern
At the Wilson Center’s Washington Forum in Washington, DC, Federal Reserve (Fed) Chairman Jerome Powell engaged in a fireside chat focusing on economic trends in North America.
Powell highlighted the robust performance of the U.S. economy, emphasizing recent data indicating limited progress on inflation throughout the year. Despite the economy’s strength, he observed a transition in the labor market toward a more favorable equilibrium.
Key Quotes:
– The U.S. performance has been characterized as “quite strong.”
– Recent data suggests a lack of substantial progress on inflation in the current year.
– The labor market is gradually shifting towards a more balanced state despite ongoing economic strength.
– Broader wage pressures are showing signs of gradual moderation.
– Estimates indicate little change in twelve-month core Personal Consumption Expenditures (PCE) inflation as of March.
– The Fed adopted a cautious stance last year, refraining from overreacting to declines; recent data haven’t instilled greater confidence.
– If elevated inflation persists, the Fed is prepared to maintain the current interest rate for as long as necessary.
– Powell underscored that restrictive monetary policy requires additional time to yield its intended effects.
USD: Powell: More Time Needed for Restrictive Policy to Work
US FED Chairman Jerome Powell said at Economic trends meeting, US Economy is doing good and robust in all sectors. Wage pressures are higher and Job growth is good. Inflation is not come to our target this year due to current circumstances. So Restrictive monetary policy sustained in this year. Hawkish comments from FED Powell moved US Dollar higher against Counter pairs.
USDCAD is moving in Ascending channel and market has fallen from the higher high area of the channel
Top officials of the United States’ central bank, including Federal Reserve Chair Jerome Powell, refrained from providing guidance on potential interest rate cuts during a discussion on Tuesday. Instead, they emphasized the necessity of maintaining restrictive monetary policy for an extended period. This announcement dashed investors’ hopes for significant reductions in borrowing costs for the current year.
Since the beginning of the year, Fed policymakers have indicated that any rate cuts would be contingent upon gaining “greater confidence” that inflation is progressing toward the central bank’s 2% target. However, recent data suggests that price pressures may be moving in the opposite direction, undermining confidence in imminent rate cuts.
Powell, speaking at a forum in Washington, acknowledged the lack of greater confidence in recent data and suggested that it might take longer than anticipated to achieve the desired level of confidence. He emphasized the need to allow restrictive policy more time to produce desired outcomes, advocating for a data-driven approach to decision-making.
While it is widely expected that the Fed will maintain current interest rates at its upcoming meeting, analysts and investors had previously anticipated rate cuts to commence in June. However, revised expectations now suggest that the first rate cut may occur in September, with dwindling odds of subsequent cuts.
Powell assured that if higher inflation persists, the Fed is prepared to maintain the current level of restriction for as long as necessary. Additionally, Fed Vice Chair Philip Jefferson emphasized the readiness of the central bank to prolong its tight monetary policy if inflation fails to decelerate as anticipated.
Despite the optimism surrounding the economy, policymakers remain cautious due to ongoing challenges in achieving their inflation target. The uncertainty regarding the timing and magnitude of potential rate cuts reflects the complex economic landscape and the need for a cautious and data-driven approach to monetary policy.
USD: Powell: ‘Lack of Further Progress’ on Inflation This Year
US FED Chairman Jerome Powell said at Economic trends meeting, US Economy is doing good and robust in all sectors. Wage pressures are higher and Job growth is good. Inflation is not come to our target this year due to current circumstances. So Restrictive monetary policy sustained in this year. Hawkish comments from FED Powell moved US Dollar higher against Counter pairs.
USDCHF is moving in Ascending trend line
During a policy forum focusing on U.S.-Canada economic relations, Federal Reserve Chair Jerome Powell addressed the current state of the U.S. economy, highlighting both its strength and the persisting challenge of inflation. Powell noted that while the economy continues to exhibit solid growth and strength in the labor market, it has yet to make significant progress towards achieving the Federal Reserve’s 2% inflation target this year.
Powell emphasized that recent data have not provided greater confidence in the trajectory of inflation, indicating that it may take longer than initially expected to reach the desired level of confidence. Consequently, he suggested that the current level of monetary policy should remain unchanged until inflation moves closer to the target.
Since July 2023, the Federal Reserve has maintained its benchmark interest rate within a target range of 5.25%-5.5%, marking the highest level in 23 years following 11 consecutive rate hikes initiated in March 2022. Powell reiterated the Fed’s commitment to maintaining the current level of policy restriction until there is more substantial progress in inflation.
The remarks come in the wake of inflation data for the first quarter of 2024, which has exceeded expectations. The consumer price index for March, released recently, indicated inflation running at a 3.5% annual rate, although lower than the peak observed around 9% in mid-2022, it has been gradually increasing since October 2023.
Powell highlighted the Federal Reserve’s preferred inflation gauge, the personal consumption expenditures price index, which showed core inflation at 2.8% in February and has remained relatively stable in recent months. He reiterated the Fed’s stance that any easing of policy would require greater confidence in a sustained move towards the 2% inflation target, a confidence that recent data have yet to instill.
USD Index is moving in Ascending channel and market has rebounded from the higher low area of the channel
Financial markets have adjusted their expectations for rate cuts in response to evolving data. Initially, traders in the fed funds futures market anticipated six or seven cuts in 2024, beginning in March. However, as data unfolded, expectations shifted to one or two reductions, assuming quarter percentage point moves, and not expected to commence until September.
While the Federal Open Market Committee (FOMC) indicated in March that it foresees three cuts this year, Powell and other policymakers have emphasized the importance of data dependency in determining policy decisions, refraining from committing to a set level of reductions.
Don’t trade all the time, trade forex only at the confirmed trade setups
Get more confirmed trade signals at premium or supreme – Click here to get more signals , 2200%, 800% growth in Real Live USD trading account of our users – click here to see , or If you want to get FREE Trial signals, You can Join FREE Signals Now!
