Fed's Jefferson: Lower inflation without unecessary amount of disruption in job market possible

Eren Sengezer FXStreet

Federal Reserve Governor Philip Jefferson said on Monday that it is possible for inflation to decline without an unnecessary amount of disruption in the job market, as reported by Reuters.

Additional takeaways

"More people do better in the US when there are periods of low inflation and sustained growth."

"Important to get back to 2% inflation to allow those sorts of sustained economic gains."

"Inflation is too high and that is hard for people across the demographic spectrum."

"Lower inflation is a prerequisite for long-term prosperity."

"Right now the labor market is very strong with demand for workers high relative to supply."

"Pandemic has had a substantial impact on labor supply."

"Fed's commitment is to sustain a firmer posture so the economy can adjust, and supply and demand move into better balance."

Market reaction

The US Dollar stays under modest bearish pressure following these comments and the US Dollar Index was last seen losing 0.35% on a daily basis at 104.88.

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 bulls regain control above 0.6950 amid USD retreat

AUD/USD regains traction and extends the previous day's bounce from the weekly low, aiming for 0.7000 in Asia on Friday. The overnight pullback in US bond yields keeps the US Dollar below an 18-month high, which in turn offers some support to the pair. Meanwhile, hawkish RBA expectations also keep the major underpinned.

USD/JPY holds gains near 158.00 after Japan's weak Household Spending data

USD/JPY clings to gains around 158.00 after data showed on Friday that Japan's Household Spending fell for the ninth straight month, undermining the Japanese Yen. Meanwhile, the US Dollar remains depressed as the overnight fall in US bond yields counters a hawkish Fed and geopolitical uncertainties, could cap any downside in the pair.

Gold remains range-bound below $4,200

Gold has given up some ground after an initial bullish attempt to reach weekly highs, returning to below the $4,200 mark per troy ounce on Friday. The US Dollar’s strong upside momentum, combined with rising US Treasury yields across the curve, seems to keep further gains in the yellow metal under scrutiny.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?

The Euro is not the sick man of Europe. France's bond market is

EUR/USD remains under pressure, near the 17-month low of 1.1161 reached on Monday. The pair has lost more than 7% since its yearly peak, as concerns over France's public finances increasingly weigh on the single currency. But behind the weakness of the Euro (EUR), the problem does not necessarily lie with the European economy as a whole.