FXStreet (Barcelona) – Bernd Weidensteiner of Commerzbank, notes that comments from Fed member Jeremy Powell supports the Fed’s data dependent stance for raising US rates.
Key Quotes
“According to the “Dot Plot”, outlining FOMC members’ take on the appropriate key interest rate, five of the 17 members expect two moves on interest rates this year. San Francisco Fed president Williams had already indicated that he belongs to this group. Jeremy Powell of the Federal Reserve Board likewise expects two interest rate steps, one in September and another in December. That said, Powell has underlined that this depends on growth picking up in the second half of the year and there being a “greater basis” for expecting a rise of inflation to 2%.”
“Powell is therefore completely in line with the Fed line according to which the economic data will determine the further course of monetary policy.”
“Powell appears to be quite optimistic regarding the economic outlook, observing “substantial growth” on the labour market, which was a better measure of the economy than GDP. In view of its volatility and the fact that the figures are prone to revision, not to mention the long delay before their publication compared to the labour market figures – this is an understandable position.”
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