How Dovish will the Fed be? - AmpGFX
|Greg Gibbs, Founder, Analyst, & PM, Amplifying Global FX Capital Pty Ltd explained that every Fed rate hike over the last year and more has resulted in a weaker USD, suggesting the Fed has a habit of delivering ‘dovish’ hikes.
Key Quotes:
"There is every reason to expect the same this week. The May policy minutes sent a number of dovish signals; concern over a flattening yield curve, ambivalence on the labor market and wages, concern over trade policy, a desire for a period of above-target inflation, thoughts that policy is getting near neutral, and the Fed funds creeping up to the IOER."
"There is evidence that Fed policy tightening is causing financial stress in some emerging markets. A weaker USD may be seen as a good thing for stabilising global markets. The parallels between the weaker EM currencies and the USD (unsustainable fiscal policies, external deficits and populist strong man politicians) suggest the Fed and Congress should be preparing for their own reckoning."
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.