Fed Chair Powell: 50 bps rate hikes are on the table for the upcoming meetings
|Speaking at an IMF panel alongside ECB President Christine Lagarde and other central bank leaders, Fed Chair Jerome Powell was questioned on the appropriateness of the money market's pricing of three 50 bps rate hikes over the next three Fed meetings. Whilst Powell was careful to clarify that he will not endorse any specific market pricing, he said that he did think that markets were priced appropriately given that, with inflation elevated, it makes sense for the Fed to move faster in tightening policy compared to previous hiking cycles.
"50 bps rate hikes are on the table", Powell said, who emphasised the Fed's commitment to achieving its 2.0% inflation target. Powell also noted that many at the Fed thought 50 bps rate hikes would be appropriate going forward, echoing the remarks of many of his FOMC colleagues in recent days. Powell also reiterated his usual observations that the US economy is very strong and that the labour market is very tight.
Market Reaction
The initial reaction in the US dollar has been modest weakness, with the DXY pulling back under 100.50 in recent trade from earlier session highs in the 100.60 area.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.