Federal Reserve's John Williams: Will adjust plan for money markets ‘as appropriate’
- Williams: Rates are low and Fed doesn't have much room to cut.
- A series of weak US data is underpinning the likelihood of a rate cut from the Fed.
New York Federal Reserve President John Williams is crossing the wires and has said the Fed is learning as it takes steps to increase liquidity in the banking system and that it will adjust its approach as needed.
Key comments:
- Officials will adjust plan for money markets ‘as appropriate’.
- Central Bank will continue to learn about demand for reserves.
- Effects of repo volatility on fed funds rate were ‘outside of recent experience’.
- Rates are low and Fed doesn't have much room to cut.
FX implications:
"Markets are pricing 20bp of easing at the 30 October meeting and a terminal rate of 1.21% (vs 1.88% currently)," analysts at Westpac explained. This is leaving the US Dollar balancing on a tight-rope and if it were not for dovish central banks elsewhere, the greenback would likely be a lot lower. A series of weak US data is underpinning the likelihood of a rate cut from the Fed and Williams has pointed out that rates are low already - That is a dangerous cocktail for the US Dollar.
Author
Ross J Burland
FXStreet
Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.
