Cleveland Fed President Loretta Mestermost of whom, as of December, had penciled in a 5.00%-5.25% policy rate in coming months.
Mester said that, for her part, she expects the Fed's policy rate to need to go "a bit higher" than that and stay there for some time to slow inflation further.
St. Louis Fed president Bullard doesn’t want to ‘stall’ on getting interest rates over 5%
In Dec meeting, Fed Chairman Powell said we need to see to bring inflation down to 2 percent. Growth in economic activity has slowed to well below its longer-run trend, which needs to be sustained.
The next FOMC meeting is from 31-Jan to 1-Feb; the market is expecting a 94.5% chance that the fed will rate a rate hike 25 bps.
DXY has reached support at 102.1. If the rate decision surprises the market or the press conference releases a more bullish rate hike pathway, DXY may test 105 again.
Mester said that, for her part, she expects the Fed's policy rate to need to go "a bit higher" than that and stay there for some time to slow inflation further.
St. Louis Fed president Bullard doesn’t want to ‘stall’ on getting interest rates over 5%
In Dec meeting, Fed Chairman Powell said we need to see to bring inflation down to 2 percent. Growth in economic activity has slowed to well below its longer-run trend, which needs to be sustained.
The next FOMC meeting is from 31-Jan to 1-Feb; the market is expecting a 94.5% chance that the fed will rate a rate hike 25 bps.
DXY has reached support at 102.1. If the rate decision surprises the market or the press conference releases a more bullish rate hike pathway, DXY may test 105 again.
Comment:
Although DXY managed to dip further into 101.50, the higher-than-expected NFPR, BOE, and ECB altitude towards very hawkish has changed. Market sentiment toward the chance of year-end rate cuts has diminished. XAUSD and the stock market correction will certainly confirm the DXY rally.