Speaking on an IMF panel along with the president of the ECB, Christine Lagardeand other central bank leaders, Fed Chairman Jerome Powell was questioned about the money market price appropriateness of three 50bp rate hikes over the next three Fed meetings.
While Powell was careful to clarify that he will not support any specific market price, he said he believed markets were priced appropriately given that, with inflation elevated, it makes sense for the Fed to move faster on tightening policy compared to with the previous rise. cycles
“50 bps rate hikes are on the table,” said Powell, who emphasized the Fed’s commitment to hit its 2.0% inflation target.
Powell also noted that many at the Fed thought 50bp rate hikes would be appropriate going forward, echoing the comments of many of his FOMC colleagues in recent days.
He also reiterated his usual observations that the US economy is very strong and the job market is very tight.
market reaction
The US dollar’s initial reaction has been one of modest weakness, with DXY retreating below 100.50 in recent trading from session highs around 100.60.
Source: Fx Street
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