- US Federal Reserve Chairman Jerome Powell hints at a possible pause on rate hikes, signaling a data-driven approach to monetary policy.
- St. Louis Fed President Bullard forecasts two more rate hikes, while others point to the importance of monitoring inflation developments.
- Hardline rhetoric from European Central Bank officials underpins the EUR/USD pair.
The pair EUR/USD started the week sideways, holding on to 1.0800 amid slightly upbeat market sentiment on the back of improving US ceiling discussions, despite hawkish rhetoric from Federal Reserve officials (Fed). At the time of writing, the EUR/USD pair was trading at 1.0804, practically sideways, having hit a daily low of 1.0795.
Investors watch out for upcoming PMI data and comments from central bank officials.
Market sentiment remains slightly upbeat, with two of the three US stock indices posting gains. Over the past week, US Federal Reserve (Fed) Chairman Jerome Powell maintained a neutral tone in his remarks last Friday, stating: “The risks of doing too much or doing too little are increasingly balanced, and our policy has adjusted to reflect that.” Fed Chairman Powell added that the Fed would be data dependent, opening the door for a pause.
Earlier on Monday, Federal Reserve officials commented that further tightening is needed, particularly St. Louis Fed President Bullard, who is anticipating two more rate hikes. At the same time, Minnesota Fed President Neil Kashkari is open to a pause, but stresses that it’s important “not to signal that we’re done.” Atlanta Fed President Raphael Bostic commented that the The policy tightening is late in coming, and he is “comfortable” waiting to see how “things play out.” Richmond Fed President Thomas Barkin commented that he “keeps trying to convince himself that inflation is on a steady decline.” “.
In terms of data, the Eurozone (EU) economic agenda showed that consumer confidence in the bloc rose 0.1 in May to -17.4 from -17.5 in April, although it was below estimates of an improvement towards -16.8.
European Central Bank policymakers, led by Christine Lagarde and Isabel Schnabel, kept up their hawkish rhetoric on Friday, trimming the euro’s (EUR) losses heading into the weekend. ECB President Lagarde stated that the ECB would do what is necessary to achieve price stability and commented that it would make no concessions to price and financial stability. ECB member Isabel Schnabel commented that the ECB must continue to fight inflation “with determination.”
Meanwhile, negotiations in the United States (USA) were set to resume on Monday, after US President Joe Biden called US House Speaker Kevin McCarthy on Sunday after for him and the Republicans to drop out of talks on Friday. Lately, US Treasury Secretary Janet Yellen has stated that the chances of the US being able to pay its bill by mid-June are shrinking.
upcoming events
The EU economic calendar will include S&P global PMI indices, current account figures and other members of the ECB. The US economic agenda will feature speakers from the Federal Reserve along with the report of the final numbers of global PMIs from S&P on Tuesday.
EUR/USD technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
