Fed policymakers speak on policy outlook after inflation data

May 16, 2024 11:38 am

Federal Reserve Bank of New York President John Williams said on Thursday that the doesn’t see the need for a rate cut in the near term. Commenting on the April Consumer Price Index (CPI) data, “kind of a positive development after a few months, where the data were disappointing,” Williams told Reuters in an exclusive interview.

Fed Williams additional comments

“Overall trend for slowing inflation looks good.”

“Optimistic inflation will continue to retreat.”

“Still lack confidence inflation is moving sustainably to 2.”

“Monetary policy is restrictive and it’s in a good place.”

“No current need to raise interest rates.”

“Economy is moving into better balance.”

“Job market is still tight, but excesses are waning.”

“Hopeful job market can balance without big rise in unemployment.”

“Expecting unemployment to rise to 4% this year.”

“Seeing inflation in low 2% range by year-end, around 2% next year.”

“Need not wait until inflation exactly at 2% to ease policy.”

“Balance sheet policy changes aimed at limiting market impact.”

“Fed balance sheet is still having a modest impact on yields.”

“No major signs of financial market risk.”

FXStreet’s FedTracker, which gauges how dovish or hawkish Fed officials are using a customized AI model, shows the following historical results about the speakers who are making public appearances on Thursday.

Barr’s last speeches have been neutral, while both Mester and Bostic’s remarks were assessed as hawkish to neutral. On the contrary, Harker’s comments have swang between neutral to dovish, but the last commentary is from three months ago.

US Dollar PRICE This week

The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the weakest against the New Zealand Dollar.

USD   -0.90% -1.15% -0.67% -0.29% -1.06% -1.35% -0.38%
EUR 0.90%   -0.30% 0.25% 0.59% -0.19% -0.48% 0.50%
GBP 1.15% 0.30%   0.47% 0.90% 0.12% -0.17% 0.79%
JPY 0.67% -0.25% -0.47%   0.34% -0.37% -0.76% 0.30%
CAD 0.29% -0.59% -0.90% -0.34%   -0.74% -1.08% -0.19%
AUD 1.06% 0.19% -0.12% 0.37% 0.74%   -0.39% 0.68%
NZD 1.35% 0.48% 0.17% 0.76% 1.08% 0.39%   0.97%
CHF 0.38% -0.50% -0.79% -0.30% 0.19% -0.68% -0.97%  

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

This section below was published as a preview of the upcoming speeches from Federal Reserve officials at 10:20 GMT.

  • Fed policymakers’ comments awaited following the April inflation report.
  • Markets see a waning probability of a Fed policy hold in September.
  • Fed rate outlook could influence the US Dollar’s valuation.

Federal Reserve (Fed) policymakers are scheduled to deliver speeches on Thursday as investors reassess the interest rate outlook following the April Consumer Price Index (CPI) data. According to the CME FedWatch Tool, the probability of a no change in the Fed’s policy rate in September declined to nearly 25% from 35% before the inflation report.

Fed Vice Chair for Supervision Michael Barr, Philadelphia Fed President Patrick Harker, Cleveland Fed President Loretta Mester and Atlanta Fed President Raphael Bostic are among the Fed officials that will speak in the American session.

The Fed has adopted a cautious tone regarding the timing of the policy pivot following the stronger-than-expected inflation readings in the first quarter of the year. The US Bureau of Labor Statistics reported on Wednesday that the core Consumer Price Index (CPI) rose 3.6% on a yearly basis in April. This reading followed the 3.8% increase recorded in March and came in line with the market expectation. On a monthly basis, the CPI and the core CPI both rose 0.3% after rising 0.4% in March. The US Dollar (USD) came under bearish pressure as market participants assessed the inflation data and the USD Index fell to its lowest level in over a month, losing 0.7% on the day.

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