Fed remains aggressive to control wage spiral
Inflation is moderating, yet the Fed remains aggressive in policy. We attribute a reason for this to the tight labour market.
Page 6 of 41
Inflation is moderating, yet the Fed remains aggressive in policy. We attribute a reason for this to the tight labour market.
Last week’s dot plots suggest rates will move higher, with the terminal rate adjusted upwards from 4.6% to 5.10%. The Fed chair’s tone during the media conference was hawkish. Risk markets were less than impressed. They sold off heavily for the rest of the week. The market thinks that Fed policy is too aggressive.
Both central banks slowed the pace of their tightening cycle this week, while delivering hawkish message and guidance, but the ECB appears to have been more aggressive
Watch today’s US Open for commentary on the latest policy decisions by the Fed, the BoE and the ECB
The Bank of England slowed the pace of hikes with an 0.5% adjustment, in a three-way split decision and hinted at more tightening, but guidance is vague
The US Federal Reserve moderated the pace of rate increases, with a 50 bps move on Wednesday, but now expects rates to peak higher and Chair Powell delivered a hawkish message
Watch today’s US Open for commentary on the CPI inflation figures and the upcoming policy decision by the central banks of the US, the UK and Europe
In this week's podcast, FXCM senior market specialists Nik and Russ discuss central banks' potential pausing. In addition, the two analysts discuss the inflation data, specifically the CPI release, which precedes the Fed's next rate hike by a day. Moreover, the BoE and ECB will hike on Thursday, with all three central banks expected to deliver 50bps. All these and more.
Watch today’s US Open for insights into Wall Street’s effort to stop the five-day slide, the 2022 lows of USOIL, the latest policy decision by the Bank of Canada and more
Watch today’s US Open for commentary on the latest data from the US, the pandemic situation in China and the RBA rate hike to the highest levels in ten years
Average hourly earnings surprised to the upside, printing at 0.6% MoM - double the 0.3% MoM expected. This has raised the spectre of a wage inflation spiral. Markets are edgy and are reacting to bullish and bearish news. Upside surprises continued with ISM Services PMI and factory orders beating forecast. The ECB has indicated a minimum of 50bps for its hike. Join FXCM Senior Market Specialists Russ and Nik as…
Risk Warning: Trading Margin FX/CFDs carries a high level of risk, and may not be suitable for all investors. Leverage can work against you. By trading, you could sustain a total loss of your deposited funds but wholesale clients could sustain losses in excess of deposits.
Exchange: ${getInstrumentData.exchange}
${getInstrumentData.bid} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)
Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.