Below are the key takeaways from the US Federal Reserve's semi-annual Monetary Policy Report published on Friday, per Reuters.
"Financial conditions have tightened further since June and are significantly tighter than a year ago."
"Ongoing increases in the fed funds rate target are necessary."
"Strongly committed to getting inflation back to 2%."
"Business credit quality remains strong, but some indicators of future business defaults are somewhat elevated."
"Financial vulnerabilities remain moderate overall."
"Net negative income does not impede monetary policy work."
"Expecting to return to net positive income at some point."
"Market liquidity remained low in Treasury and other key markets versus pre-pandemic levels."
"Bringing inflation back to 2% likely requires period of below-trend growth, some softening of labor market conditions."
"Underlying momentum in the economy likely remains subdued."
"Valuation pressures in equity markets have increased modestly."
"For core services ex-housing sector, inflation remains elevated; prospects for it slowing may depend in part on an easing of tight labor market conditions."
"Core foreign inflation remains high and inflationary pressures are broad."
"Some signs of increased stress for lower-income households as near-prime, subprime delinquency rates have risen."
"Fed rate control toolkit effective at maintaining federal funds rate."
"Will adjust balance sheet drawdown process if there is a need to."
"Strong reverse repo takeup reflects market rates and investor caution."
"Labor market has remained extremely tight and there is a significant labor supply shortfall relative to the levels expected before the pandemic."
"Tight labor market conditions have largely erased pandemic-induced widening of employment gaps across demographic groups."
"Officials mindful of monetary policy rules, don’t use them to drive policy."
"Rate hikes have narrowed gap between policy rule settings and real-world level."
"Labor force participation rate is likely to remain well below its level from before the pandemic."
The US Dollar Index showed no immediate reaction to this publication and was last seen trading flat at 104.93.
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.
Follow us on Telegram
Stay updated of all the news
EUR/USD closes in on 1.0700 amid broad USD strength
EUR/USD came under renewed bearish pressure in the American session and dropped to its lowest level since late March near 1.0700. Stronger-than-forecast PCE inflation data and hawkish comments from Fed's Mester provide a boost to the US Dollar and weigh on the pair.
GBP/USD loses bullish momentum after US data, falls below 1.2350
GBP/USD has reversed its direction and erased a large portion of its daily gains on Friday after the data from the US showed that the annual core PCE inflation edged higher to 4.7% in April. Although the pair clings to small daily gains below 1.2350, it remains on track to end the third straight week in negative territory.
Gold erases daily gains, holds above $1,940
Gold price turned south and declined to the $1,940 area in the American session on Friday. The benchmark 10-year US Treasury bond yield holds stead above 3.8% after stronger-than-expected core PCE inflation data from the US, not allowing XAU/USD to gain traction.
Ethereum price to outpace Bitcoin price as ETH jumps over key hurdle where BTC fumbles
ETH is working on its recovery after it dipped to a two-week low on Thursday. While Bitcoin price has failed to make a similar move and head back above $26,500, Ethereum is outpacing Bitcoin and has been able to push above $1,800.
Ford Stock: New agreement will give customers access to 12,000 Tesla chargers
Ford (F) stock has advanced about 2.5% early Friday following CEO Chris Farley’s announcement that Ford owners will be able to charge their EVs at Tesla Superchargers beginning in early 2024.