Fed: Extended pause message tempers hike bets – DBS

FXStreet Insights Team FXStreet

DBS Group Research’s Philip Wee says the Federal Reserve is working to cool hawkish expectations ahead of Kevin Warsh’s appointment as Chair on May 15. Officials are stressing an extended pause despite higher near-term inflation expectations from energy shocks, pointing to stable long-term inflation and wages and softer labour data, with April nonfarm payrolls seen at just 50k–100k.

Policy patience despite energy shocks

"This cooling of geopolitical heat coincides with the Fed’s strategic effort to temper hawkish expectations."

"Ahead of Kevin Warsh assuming the Fed Chairmanship on May 15, officials have sought to correct market pricing of late-2026 rate hikes by emphasizing an extended pause."

"Despite a rise in one-year inflation expectations driven by energy shocks from the Iran conflict, Fed officials maintain that current rates are sufficiently restrictive."

"With long-term inflation expectations and wage growth remaining stable, the Fed is resisting aggressive tightening, a stance supported by today’s cooling labour market data."

"Nonfarm payrolls are expected to drop to the 50k–100k range for April, a far cry from the robust readings that fuelled the USD’s surge in 2022."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD clings to multi-day peaks below 1.3500

GBP/USD trades with marked gains on Friday, now giving away some gains following an earlier surpass of the key 1.3500 yardstick. Indeed, Cable gathers fresh steam amid the strong offered stance in the Greenback, all after US NFP badly missed expectations in July.

EUR/USD: Post-NFP bounce falters around 1.1580

EUR/USD reverses Thursday’s decline and trades with solid gains in the 1.1560 region, or two-month peaks, on Friday. The pair’s firm performance comes in a context of a sharp correction in the US Dollar as investors continue to assess disheartening US NFP readings.

How Wall Street rigs the game [Video]

In this week’s Live from the Vault, Andrew Maguire is joined by Peter Antico and Sean Stone to discuss the Paradigm of Money - an in-depth expose of financial market corruption, from naked shorting to the two-tier system that protects Wall Street.

XRP Price Forecast: XRP nears critical $1.00 support

Ripple (XRP) remains pressured on Friday, trading around $1.03 at the time of writing. The token appears to hold this current level as support but lacks a catalyst to sustain a knee-jerk rebound toward the next key resistance at $1.10.

Is Gold about to enter its biggest bull run since 2020?

Gold has stormed back into the spotlight and its next move could leave late buyers chasing. On August 5, the yellow metal surged almost 7% – roughly $174 – to close near $4,308 an ounce, posting one of its biggest daily advances in recent history. A weaker U.S dollar, falling Treasury yields, changing Federal Reserve expectations and renewed safe-haven demand all struck at once.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.