Dudley in a TV interview 08.02.2018
- The global economy is doing fine
- Decline in equity markets doesn’t have economic implications at this point;
- bond yields moving higher is putting pressure on stocks
- ‘Further’ gradual hikes mentioned in Fed statement meant Fed has more economic confidence
- Tax cut package does help increase confidence
- A More Persistent Stock Fall Could Affect Spending
- More Confident On Need To Remove Accommodation
- Doesn’t put to much weight in one wage report
- To support a March rate hike , he needs confidence that the Us economy continues to grow above trend
- Views On Rate Hike Could Be Changed By Weakening Economy
- Main outlook for three rate hikes is reasonable; could do four hikes if economic outlook gains
- Was surprised about how low the rates were prior to this move
- Bond yields rises are reflecting the Fed’s rate outlook
- The gap between the Fed and market expectations on rates is fairly small
- Tight labour market will boost inflation
- If we were to move inflation goal, could hurt Fed credibility
- There is a risk that the economy overheats which could push down unemployment and push up inflation, causing Fed to tighten harder
- Powell’s Transition To Fed Chair To Be Smooth, Says He Is On The ‘Same Page As Yellen
- Change In Chair Will Be ‘Evolution, Not Revolution’
They all have A LOT to say today . During Dudley’s intervention USD whipsawed 20 pips up n down . As we stand now:
EURUSD 1.2245
CABLE 1.3010
USDJPY 108.77
AUDUSD 0.7788
NZDUSD 0.7210
USDCAD 1.2608
USDCHF 0.9375
Latest posts by K-man (see all)
- #Canada #Employment report preview. - November 5, 2021
- Rotation, ROTATION! - November 24, 2020
- $CNH living on hopium? Big week for the Yuan this. - January 13, 2020
We believe the Fed is out to hurt our POTUS by keeping a lid on any outward appearance of growth, in spite of the seemingly benign rhetoric. Note he said “surprised” how low rates were “prior to this move”, yet he is a voting member (!) and is as responsible as ANY for the crippling zero interest rate policies that have hamstrung the (global) economy TO this point. His nonsense is exactly why a “political Fed” (for the prior 8 years) is a dangerous Fed and why Mr. Trump is facing an extremely difficult situation.
That said, this IS going to be great for FX rates, and 2018 is going to rock ‘n roll — but at what ultimate cost?
Thanks Bill , sorry late reply as I had some pc issues. The ” at what cost” is what the market is trying to figure out right now and in doubt “sell risk” is the motto. As I was expecting to have a yoyo year or at least first part of the year for the USD is starting to pan out .
The hurt POTUS bit is a little unclear to me as Powell is supposed to be the WH appointed man for the job . Is he going to tell admin to bugger off or is he paid enough to become the ultra dove ?
The other thing is, by confusing the market like Dudley , Kashkari etc, aren’t these Fed reality stars not actually playing POTUS game? Spreading doubt never helps a currency medium term. His Royal Redness loves a lower usd …