Fed's Bowman: Further interest rate hikes likely with inflation still too high

Eren Sengezer FXStreet

Further interest rate increases will likely be appropriate, with inflation still being too high, Federal Reserve Governor Michelle Bowman said on Friday, per Reuters.

Key quotes

"Fed policy will need to be held at a restrictive level for some time to return inflation to 2% 'in a timely way."

"Continued risk of a further increase in energy prices could reverse some of the recent progress on lowering inflation."

"The economy is still growing at a solid pace, with robust consumer spending and solid job gains."

"Bank lending standards have tightened but there is no sign of a sharp contraction of credit that would significantly slow the economy."

"Expecting progress on inflation to be slow under current conditions, suggesting the need for even tighter policy."

Market reaction

These comments failed to trigger a noticeable market reaction and the US Dollar Index was last seen posting small daily losses at 105.36.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

AUD/USD falls to near 0.7100 after slipping below 50-day EMA

AUD/USD depreciates after registering minor gains in the previous day, trading around 0.7120 during the Asian hours. The technical analysis of the daily chart shows the pair consolidating sideways within a rectangle pattern, as neither bulls nor bears gain control. The AUD/USD pair is holding a slight bearish tone however as it sits beneath both the nine-day and 50-day EMAs.

Japanese Yen edges up but remains close to the 160.00 intervention threshold

The Japanese Yen edges up against the US Dollar on Friday, but the USD/JPY pair remains above 159.90 at the time of writing, unable to put a significant distance from the 160.00 level, considered the limit of tolerable JPY weakness for Japanese authorities.

Gold returns to the red, awaits US NFP

Gold price is looking to test the weekly lows, while in the red near $4,450 in the early European session on Friday. The precious metal remains vulnerable amid ongoing geopolitical turmoil. Traders will closely monitor the developments surrounding the US-Iran peace deal and the US May employment report later on Friday.

Arthur Hayes' “Holy Trinity” is dead: Exits Zcash after Orchard Pool exploit

Arthur Hayes has entirely dumped his “Holy Trinity” holdings by offloading his Zcash holdings on Friday. The privacy coin is down 13% so far on Friday, extending Thursday’s 26% decline after an Orchard Shielded Pool audit revealed a critical vulnerability that allowed the undetectable minting of fake coins. Hayes continues to hold Worldcoin ahead of the upcoming SpaceX Initial Public Offering, on the chance of a “high-beta proxy” rally.

Nonfarm Payrolls set to show stable labor market in May as markets digest Fed hawkish shift

The United States Bureau of Labor Statistics will release the Nonfarm Payrolls data for May on Friday at 12:30 GMT. Investors expect NFP to rise by 85K following the surprisingly strong 185K and 115K increases recorded in March and April, respectively.

Recession on paper: What really moves the Canadian Loonie now?

Statistics Canada handed the headline writers a gift and the analysts a headache. Real GDP shrank 0.1% on an annualized basis in the first quarter, and with the fourth quarter of 2025 revised down to a 1.0% contraction, that is two negative quarters in a row, the textbook definition of a technical recession and Canada's first since the pandemic.