Having witnessed firmer US employment numbers and a disappointment from the ISM Services PMI for December, multiple Federal Reserve (Fed) officials opined for the US economic conditions and the central bank’s next move.
Notable among them were Atlanta Federal Reserve President Raphael Bostic, Outgoing Chicago Fed President Charles Evans, Kansas City Fed President Esther George and Richmond Federal Reserve Bank President Thomas Barkin.
Firstly, the Wall Street Journal (WSJ) quoted Chicago Fed President Evans saying, “It was possible the economic data would support raising the policy rate by 25 basis points at the Fed's next gathering.”
“The Fed is in a good spot having stepped down to a 50-basis-point increase in December,” added Fed’s Evans per WSJ reported Reuters.
The news also mentioned Chicago Fed President as saying, "If they step it down again to 25 basis points that allows a little more time - as they continue to increase the funds rate to the same point that I was expecting - to let the data evolve.”
Following him were the additional comments from Atlanta Fed President Bostic who mentioned that the holiday shopping numbers could influence rate decision, “if consumers proved more or less resilient”. The policymaker previously raised possibilities of the US economic slowdown on Friday.
Also read: Fed's Bostic: US economy is definitely slowing
Additionally, Kansas City Fed President Esther George signalled that the longer inflation stays high, the greater the chance it will get embedded and will be more costly to combat. The policymaker also stated that the renewed inflation pressures from energy, crop prices are ‘very real risk’. “How much additional policy tightening will be needed is an ‘essential aspect’ of deliberations,” per Fed’s George.
Richmond Fed President Barkin praised the last two months of inflation reports by terming them as “a step in the right direction,” but marked fears from the higher median figures. “Studies forecast 6-12 months before pullbacks in demand quiet the rate of inflation,” added Fed’s Barkin.
The policymaker also stated that more gradual interest rate path should limit harm to economy while also adding, “(It) makes sense to steer more deliberately on rates in context of policy lags.”
Market implications
Despite the mixed comments from the Fed officials, the majority of them do support softer rate hikes, which in turn suggests further hardships for the US Dollar.
Also read: EUR/USD Weekly Forecast: US Dollar starts off 2023 on the right foot
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD struggles to hold above 1.1800 ahead of US data
EUR/USD finds it difficult to gather recovery momentum and retreats below 1.1800 in the second half of the day on Thursday. The US Dollar (USD) stays resilient against its peers after the hawkish surprise in FOMC Minutes, weighing on the pair ahead of the next batch of US data.
GBP/USD recovers above 1.3500 amid better mood
GBP/USD finds fresh demand and rises back above 1.3500 in the European session on Thursday. Improving risk sentiment and renewed US Dollar weakness are helping the pair recover ground ahead of mid-tier US data releases and Fedspeak.
Gold retreats from daily highs, trades below $5,000
Gold finds it difficult to stabilize above the $5,000 psychological mark on Thursday and trades slightly below this level in the early American session. Escalating geopolitical tensions in the Middle East help XAU/USD hold its ground, while the broad-based USD strength caps the pair's upside.
Injective token surges over 13% following the approval of the mainnet upgrade proposal
Injective price rallies over 13% on Thursday after the network confirmed the approval of its IIP-619 proposal. The green light for the mainnet upgrade has boosted traders’ sentiment, as the upgrade aims to scale Injective’s real-time Ethereum Virtual Machine architecture and enhance its capabilities to support next-generation payments. The technical outlook suggests further gains if INJ breaks above key resistance.
Hawkish Fed minutes and a market finding its footing
It was green across the board for US Stock market indexes at the close on Wednesday, with most S&P 500 names ending higher, adding 38 points (0.6%) to 6,881 overall. At the GICS sector level, energy led gains, followed by technology and consumer discretionary, while utilities and real estate posted the largest losses.
Palo Alto Networks stock down despite earnings beat Premium
Palo Alto Networks (PANW) stock sold off sharply following the company's second-quarter fiscal 2026 earnings release. Shares of the digital security company fell about 9% to $149, a price Wall Street hasn't seen since the April 7, 2025, low caused by President Donald Trump's imposition of tariffs.