USD – The US dollar rallied on Wednesday, supported by comments from Fed Chair Powell, who said the biggest risk to the US economy is persistent inflation and not that interest rate hikes will slow the economy too much.
Discussing Powell’s speech, Wells Fargo analysts stated that Powell “sounded quite hawkish. He was talking about wanting to preempt or get ahead of any deanchoring or unwanted rise in inflation expectations… that’s maybe a bit of a departure from the perception of the market in the past few months that they would react to higher inflation expectations, and it seems if anything that they’re going to be proactive rather than reactive.”
Discussing Powell’s speech, Wells Fargo analysts stated that Powell “sounded quite hawkish. He was talking about wanting to preempt or get ahead of any deanchoring or unwanted rise in inflation expectations… that’s maybe a bit of a departure from the perception of the market in the past few months that they would react to higher inflation expectations, and it seems if anything that they’re going to be proactive rather than reactive.”