The focus this week turns to the Fed. Economists at TD Securities see the bar rising for the Fed to generate a hawkish market reaction.
Fed to deliver more of the same
We expect the Fed to maintain a tightening bias, likely aiming to show the market that policy could be tightened further if needed.
The market is trying to unpack the nuances between the Fed’s rhetoric, data trends and surprises, and the aggressive tightening of financial conditions. There is a bit of a tug and war between these indicators, especially as some of the recent sell-off in longer-dated USTs doesn’t jibe with the data, Fed repricing or macro setup. Instead, it likely reflects a mismatch of supply and demand. That’s not fundamentally supportive of the USD, especially if breaks the growth cycle.
While we expect the Fed to deliver more of the same, it’s unclear how much further gains the USD will achieve unless the Fed appears more willing to open the door to more hikes.
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 consolidates below 1.0900 following Wednesday's rally
EUR/USD trades in a tight range below 1.0900 after registering impressive gains on Wednesday. The US Dollar stays resilient against its peers following the CPI-inspired selloff as investors await mid-tier data releases and comments from Fed officials.
GBP/USD corrects lower after testing 1.2700
Following Wednesday's upsurge, GBP/USD stretched higher and touched a fresh multi-week high at 1.2700 in the Asian session on Thursday. With the market focus shifting to US Jobless Claims data, the pair corrects lower in the European trading hours.
Gold finds resistance near $2,400, retreats toward $2,380
Gold advanced toward $2,400 on Wednesday as US Treasury bond yields pushed lower following the April inflation data. The modest rebound seen in yields combined with the US Dollar's resilience, however, causes XAU/USD to retreat toward $2,380 ahead of US data.
Bitcoin likely to return to all-time high of $73,949, QCP Capital says
Bitcoin (BTC) price is likely to rally back to $74,000 in the coming weeks, it's all-time high reached in March, riding on three bullish catalysts, according to crypto trading firm QCP Capital.
Dow Jones Industrial Average soars 350 points, sets new all-time high as rate cut hopes surge
The Dow Jones Industrial Average clipped into a fresh all-time high on Wednesday, gaining almost nine-tenths of a percent during the US market session after US Consumer Price Index inflation slipped further back.