St. Louis Federal Reserve's President James Bullard said US interest rates have to rise further to ensure that inflationary pressures recede.
''We’re almost into a zone that we could call restrictive - we’re not quite there yet,” Bullard said Wednesday in an online Wall Street Journal interview. Officials want to ensure inflation will come down on a steady path to the 2% target. “We don’t want to waver on that,” he said.
“Policy has to stay on the tighter side during 2023” as the disinflationary process unfolds, Bullard added.
Bullard has pencilled in a forecast for a rate range of 5.25% to 5.5% by the end of this year.
US Dollar update
It has been a volatile spell in the forex space with the US Dollar whipsawed on the day after a slew of weak data suggested the world's largest economy is finally slowing down. Wednesday's economic reports, Producer Price Index and Retail Sales which showed disinflationary tendencies in the data, reinforced expectations that the Fed will continue to reduce its tightening pace in upcoming meetings.
The data followed a turbulent Bank of Japan event. At a two-day policy meeting, the BOJ kept intact its YCC targets and made no change to its guidance that allows the 10-year bond yield to move 50 basis points on either side of its 0% target. The yen was broadly weaker, supporting the US Dollar momentarily before the Yen walked back some of its losses amid speculation that the BOJ was likely to tighten policy soon.
DXY index:
We are getting a burst of life from the bulls in recent trade as follows:
The hourly W-formation is a reversion pattern and the resistance could prove to be a tough nut to crack for the rest of the day.
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 strong gains near 1.1100 despite upbeat US data
EUR/USD trades at its highest level since early October near 1.1100 in the second half of the day on Thursday. Despite the upbeat Jobless Claims data from the US, the US Dollar (USD) stays under persistent selling pressure as the Trump administration's tariff announcements feed into stagflation fears.
GBP/USD retreats slightly, holds above 1.3150
GBP/USD retreats slightly after testing 1.3200 but holds comfortably above 1.3150 in the American session. The US Dollar (USD) struggles to find demand despite the better-than-expected Initial Jobless Claims data, as investors grow increasingly worried about an economic downturn on the new trade regime.
Gold slumps below $3,100 as correction from record-high picks up steam
Gold's correction from the all-time peak set at $3,167 deepens after the drop below the $3,100 mark. The precious metal struggles to capitalize on risk-aversion after US President Donald Trump's tariff decisions as investors assess a potentially worsening demand outlook.
SOL is the winner as Solana chain turns into battleground for meme coin launchpad and DEX
Solana (SOL) gains nearly 2% in the last 24 hours and trades at 118.28 at the time of writing on Thursday. A Decentralized Exchange (DEX) and a meme coin launchpad built on the Solana blockchain have waged a war for users and compete for the trade volume on the chain.
Trump’s “Liberation Day” tariffs on the way
United States (US) President Donald Trump’s self-styled “Liberation Day” has finally arrived. After four straight failures to kick off Donald Trump’s “day one” tariffs that were supposed to be implemented when President Trump assumed office 72 days ago, Trump’s team is slated to finally unveil a sweeping, lopsided package of “reciprocal” tariffs.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.