Fed's Mester: Will likely need to hike rates one more time this year

Lallalit Srijandorn FXStreet

Federal Reserve Bank of Cleveland President Loretta Mester speaks on her economic outlook on Monday, per Reuters.

Key quotes

"Monetary policy path depends on how economy performs."

"Fed will likely need to hike rates one more time this year."

"Economy on ‘good path’ amid ongoing rebalancing of supply and demand."

"Job market strong but slowing, coming into better balance."

"Inflation ‘too high’ but sees welcome signs of progress lowering price pressures."

"Fed will need to keep rates high to ensure return to 2% inflation."

"Economy has grown more strongly than expected."

"Risks to inflation tilted toward upside."

"Credit conditions have tightened in line with monetary policy."

"Sees some signs wage pressures are easing."

Market reaction

As of writing, the US Dollar Index was unchanged on the day at 107.03.

Author

Lallalit Srijandorn

FXStreet

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

AUD/USD consolidates above 0.7000 as RBA hike bets support amid softer USD

AUD/USD steadies above 0.7000 in Friday’s Asian session, stalling the overnight pullback from a one-month top as RBA rate-hike expectations act as a tailwind for the Aussie. Moreover, the US Dollar remains on the back foot amid hopes of Iran diplomacy, further supporting the currency pair. However, geopolitical risks and hawkish Fed expectations limit USD losses.

USD/JPY flatlines near 157.70 after hot Tokyo CPI as focus remains on BoJ

USD/JPY consolidates around 157.70 during the Asian session on Friday, moving little following the release of hot Tokyo CPI as focus remains on the highly anticipated BoJ rate decision. Meanwhile, upside remains capped as the US Dollar stays depressed amid the Euro's post-ECB rise. However, Thursday's US macro data reaffirmed Fed hike bets, which, along with geopolitical uncertainties, support the buck and the currency pair.

Gold falls to near $4,000 as US PCE data reinforces December Fed hike odds

Gold price falls to around $4,015 during the early Asian session on Friday. The precious metal loses ground as US inflation data reinforced expectations ‌of a Federal Reserve interest rate hike later this year.

Can Bitcoin rally if the Federal Reserve keeps rates higher for longer?

The US Federal Reserve raising interest rates in September after a three-year gap to control alarming inflation numbers renews the fear of reduced liquidity weighing on Bitcoin, similar to the 2022 bear market.

The hawkish Fed can't lift the US Dollar anymore

About three more Federal Reserve hikes are already priced in, and the central banks behind the Euro, Pound, Yen and Loonie are raising rates or about to. That leaves the US Dollar Index with little to gain if the Fed keeps leaning toward higher rates.

A hot US economy is supposed to sink Gold. It didn't. Here's why

Gold (XAU/USD) remains under pressure near $4,000, as stronger-than-expected United States (US) economic data reinforce expectations of another Federal Reserve (Fed) interest rate hike in December. Economic growth is accelerating, inflation remains elevated, and borrowing costs could rise further.