"Fed is quite focused on bringing inflation down to 2%", "we've moved quickly this year to restrictive territory", "we are now at a point where we can pay more attention to the rate we are getting to, less on pace" and "we may shift to slower pace of rate increases at next meeting" are some other key comments form the Federal Reserve’s vice chair of supervision, Michael Barr.
Powell's dovish words put the US Dollar in selling mode
LATEST FED MEASURES TO BATTLE INFLATION
The New York Fed’s John Williams who recently said that he predicts a time, “probably 2024”, when the Fed will lower the federal funds rate, has today said on Fox News that the Fed has a ways to go on rate hikes.
Federal Reserve (Fed) Governor Michelle Bowman noted on Thursday that the headline and core inflation have slowed slightly but added that they are still unacceptably high, as reported by Reuters.
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October Fed decision review
The Fed is data dependent – that is the sole message traders need to take from the critical rate decision. The central bank raised borrowing costs by 75 bps for the fourth consecutive time, but markets were already looking into December. That explains the cheerful market reaction.
The US Fed on Wednesday announced that it raised the policy rate, federal funds rate, by 75 bps to the range of 3.75-4% following the November monetary policy meeting. This decision came in line with the market expectation. The dollar came under renewed selling pressure and the US Dollar Index declined below 111.00 with the initial reaction.
August Fed decision review
Three times a charm – the third consecutive triple-sized rate hike by the Fed puts borrowing costs above 3% – but it matters is 2023. The world's most powerful central bank has also released forecasts for next year – and they do not paint a pretty picture.
The US Federal Reserve on Wednesday announced that it raised the policy rate, federal funds rate, by 75 bps to the range of 3-3.25%. This decision came in line with the market expectation.
July Fed decision review
"We think it's time to go to a meeting-by-meeting basis" – investors have seen this key quote as lowering the chance for yet another 75 bps rate hike in September. Markets are up, the dollar is down. Powell has also skipped a chance to push back against market expectations for rate cuts next year.
The US Federal Reserve on Wednesday announced that it had lifted the policy rate, federal funds rate, by 75 bps to the range of 2.25-2.5%. This decision came in line with the market expectation. In its policy statement, the Fed noted that it anticipates that ongoing increases in the policy rate will be appropriate.
June Fed decision review
The US Federal Reserve on Wednesday announced that it had lifted interest rates by 75 bps to 1.50-1.75%, as expected. The vote split was 10 to one, with Esther George favouring a 50 bps rate hike. The US central bank said in its statement that it anticipates ongoing increases to interest rates to be appropriate, noting that it is strongly committed to returning inflation to 2.0%.
Is the Federal Reserve serious enough about fighting inflation? That is the main question for markets, and my answer is yes. The decision only provides a nod to the Fed's other mandate of full employment, and undoubtedly focuses on crushing prices. The words "strongly committed" are a significant upgrade to the Fed's language.
April Fed decision review
The US Federal Reserve announced on Wednesday that the FOMC had agreed to raise the target range for the federal funds rate by 50 basis points to 0.75% to 1%, in line with expectations. The Fed further noted that it will begin trimming the balance sheet on June 1, starting with a $47.5 billion cap on monthly runoff and rising to $95 billion monthly after three months.
The Federal Reserve has lifted its leg from the hawkishness pedal – but remains en route to "expeditious" tightening, which is set to keep the dollar bid. After a series of hawkish comments on the impact of inflation – and kicking off the presser by talking directly to the American people – Fed Powell sent the dollar higher. But, traders want to know what's next.