Fed's Daly: Two more rate hikes this year a very reasonable projection

Eren Sengezer FXStreet

Federal Reserve Bank of San Francisco President Mary Daly told Reuters on Friday that two more interest rate increases this year would be a "very reasonable projection."

Key takeaways

"Strongly supported June decision to stand pat on rates."

"Risks of under-tightening vs over-tightening are about balanced."

"Community contacts worried housing has hit bottom, and rents are reaccelerating."

"Banking contacts thoughtful about loan books, careful about balance sheets."

"Credit tightening so far is consistent with what would have been expected without March banking turmoil."

"We remain watchful on potential for extra tightening; it's another good reason to slow the rate-hike pace."

"Community, business contacts see inflation, labor shortages as big issues."

"Inflation expectations, and frequency and magnitude of price changes, are both on a downward trajectory."

"We want to work resolutely and carefully to restore price stability."

Market reaction

The US Dollar preserves its strength after these comments and the US Dollar Index was last seen rising 0.4% on the day at 102.80.

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 climbs toward 0.7000 after strong China data dump

AUD/USD attracts follow-through buyers for the second straight day on Monday, extending last week's recovery toward 0.7000 in Monday's Asian trading. Strong Chniese Q3 GDP and activity data for September strengthen the pair's advance, following RBA Assistant Governor Chris Kent's hawkish remarks.

USD/JPY struggles near 158.00 amid hawkish BoJ, subdued USD

USD/JPY remains defensive near 158.00 in the Asian session on Monday, as the US Dollar remains depressed near a two-week low amid the recent decline in US bond yields. Furthermore, looming intervention risks underpin the Japanese Yen and weigh on the pair amid BoJ Governor Kazuo Ueda's hawkish remarks. However, Fed rate-hike bets and geopolitical uncertainties could limit USD losses and the major.

Gold stalls below $4,200 as Fed rate-hike bets limit upside

Gold (XAU/USD) struggles after opening the week higher. The US Dollar (USD) and US Treasury yields find some footing following last week’s pullback as traders assess the Federal Reserve’s (Fed) interest rate path and geopolitical developments.

Crypto Today: Bitcoin, Ethereum, XRP extend recovery despite ETFs outflows

Bitcoin edges higher above $82,000, building strong structural support despite roughly $229 million in ETF outflows last week. Ethereum recovers above $2,400 as bulls strive to regain trend control, backed by a subtle recovery in momentum indicators.

Higher than expected inflation shakes markets: What to prepare for?

US CPI report came in stronger than expected, lifting the probability of a December rate hike higher once again. Even though Fed Chair Warsh reinforced expectations of a hold for the October’s meeting, markets now face a two-step event: a likely pause on October 28, followed by an interest rate hike on December 9.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff

Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.