US Treasury Sec. Yellen: More shocks likely to ‘challenge the economy’

Dhwani Mehta FXStreet

US Treasury Secretary Janet Yellen warned Thursday, the coronavirus pandemic and the Russia-Ukraine war pose risks of big economic shocks, with downturns “likely to continue to challenge the economy,” per AP News.

Key quotes

With “large negative shocks” inevitable, she said, policymakers have learned from the Great Recession that it’s imperative to exit economic downturns “as quickly as possible.”

“Countries will fare better if their economies are more resilient and less fragile.”

“Improved understanding of breaks in supply chains, increases in commodity prices, bursting of asset bubbles, and labor and productivity shocks can help policymakers implement reforms that bolster our economic resilience.”

Related reads

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

AUD/USD hangs close to monthly lows, still defends 0.7100 ahead of Fed decision

AUD/USD retains its negative bias for the third straight day, defending 0.7100 while trading close to a monthly low in Wednesday's Asian session on Wednesday. The US Dollar stands firm near a two-week high as the anticipated Fed rate hike and oil-driven inflation fears continue to push US bond yields to a multi-year high. Furthermore, escalating Middle East tensions benefit the safe-haven buck and weigh on the risk-sensitive Aussie.

USD/JPY holds firm above 155.00, awaits Fed policy announcements

USD/JPY climbs to a fresh one-week high above 155.00 in the Asian session on Wednesday amid a bullish US Dollar. Oil-driven inflation fears, along with the anticipated Fed rate hike, continue to support surging US bond yields. Moreover, rising US-Iran tensions underpin the USD's reserve currency status. The pair, however, remains below the mid-155.00s as bulls seem hesitant ahead of the Fed decision later today and the BoJ meeting, starting on Thursday.

Gold clings to recovery gains above $4,300, awaits Fed

Gold struggles to capitalize on its modest intraday move higher and remains below the $4,350 level in European trading on Wednesday. The US Dollar pauses for a breather after touching a two-week high and offers some support to the commodity. Traders, however, seem hesitant to place aggressive directional bets and opt to wait on the sidelines heading into the key Fed event risk.

Bitcoin, Ethereum, and Ripple retreat as Fed rate decision looms

Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) remain under pressure and consolidate at the time of writing on Wednesday after falling more than 3%, 4% and 9%, respectively, as the Clarity Act failed to advance in the Senate on Tuesday.

Asian stocks trade with modest gains as investors remain cautious ahead of Fed decision

Asian equity markets trade with modest gains on Wednesday, tracking stability in US stock index futures, though sentiment remains cautious ahead of the highly anticipated US Federal Reserve policy decision. High oil prices, escalating Middle East tensions and surging bond yields also kept markets on edge.

How Japan became the World's Banker and why that era may be ending

Japan's ultra-low interest rates helped finance trillions of dollars in global investments for more than a decade, making the Japanese Yen one of the world’s cheapest sources of funding. With the Bank of Japan expected to tighten policy again this week, that advantage may be entering a new phase. While most major economies raised interest rates, Japan remained the world's outlier.