Federal Reserve (Fed) Chair Jerome Powell said recent data suggest that they’re getting back on a disinflationary path and that unexpected labor market weakening could prompt a policy reaction, BBH macro analysts note.
Fed policy might pivot soon
“Fed Chair Jerome Powell said recent data ‘suggest that we’re getting back on a disinflationary path. What we’d like to see is more data like what we’ve been seeing recently.’ He added that unexpected labor market weakening could prompt a policy reaction.”
“Elsewhere, Goolsbee said ‘If employment starts falling apart or if the economy begins to weaken, which you’ve seen some warning signs, you’ve got to balance that off with how progress you’re making on the price front. The unemployment rate is still quite low, but it has been rising.’”
“More and more Fed officials are expressing concern about the state of the labor market. We started to see this last week, when both Goolsbee and Daly hinted that Fed policy might pivot soon. Again, the Fed is certainly more concerned about the labor market than it's been in the past. If the data cooperate, we believe a September cut remains very much in play.”
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US ADP data
EUR/USD continues to trade in positive territory above 1.0750 in the American session on Wednesday. The data from the US showed that employment in private sector rose less than expected in June, making it difficult for the US Dollar to find demand ahead of FOMC Minutes.
GBP/USD climbs above 1.2700 on USD weakness
GBP/USD preserves its bullish momentum and trades above 1.2700 in the second half of the day on Wednesday. The weaker-than-forecast ADP Employment Change data and the increase seen in weekly Jobless Claims weigh on the USD and allow the pair to stretch higher.
Gold jumps above $2,350 after US data
Gold gathers bullish momentum and trades at its highest level in over a week above $2,350. Following the disappointing ADP Employment Change and Initial Jobless Claims data from the US, the 10-year US yield stretches lower, helping XAU/USD extend its daily rally.
Crypto Today: Bitcoin erases gains from end of June, Ethereum declines while Ripple holds
Bitcoin wipes out gains from the last week of June and falls below $60,000 on Wednesday. Ethereum and top altcoins ranked by market capitalization erased gains as the inflation outlook worsened.
US markets back on top after Powell's confidence in disinflation
Speaking at the ECB conference on Tuesday, the current Fed’s chief noted that the US is back on a "disinflationary path". Of course, this was followed by caveats that more data is needed to decide on a rate cut.