Fed's Mester: Higher rates are needed to make sure the disinflation process continues

Haresh Menghani FXStreet

Adding to her earlier comments, Federal Reserve Bank of Cleveland President Loretta Mester, during the Q&A session before the 50 Club of Cleveland Monthly Meeting, said that higher rates are needed to make sure the disinflation process continues.

Additional quotes:

Fed will keep rates restrictive to get inflation down
A.I. technology will change a lot in the economy
Student loan restart won't bring immediate change in consumer spending
Do not see the US Dollar (USD) getting dethroned; USD is a very strong currency.

Market reaction

The hawkish-sounding remarks assist the USD Index, which tracks the Greenback against a basket of currencies, to stand tall near its highest level since late November 2022 touched during the Asian session on Tuesday.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

EUR/USD trims gains, back below 1.1800

EUR/USD now loses some upside momentum, returning to the area below the 1.1800 support as the Greenback manages to regain some composure following the SCOTUS-led pullback earlier in the session.

GBP/USD off highs, recedes to the sub-1.3500 area

Following earlier highs north of 1.3500 the figure, GBP/USD now faces some renewed downside pressure, revisiting the 1.3490 zone as the US Dollar manages to regain some upside impulse in the latter part of the NA session on Friday.

Gold climbs to weekly tops, approaches $5,100/oz

Gold keeps the bid tone well in place at the end of the week, now hitting fresh weekly highs and retargeting the key $5,100 mark per troy ounce. The move higher in the yellow metal comes in response to ongoing geopolitical tensions in the Middle East and modest losses in the US Dollar.