Powell's interview saw market volatility, but prices popped with the Fed chair not sounding any more aggressive about raising interest rates.
Fed Chair Jerome Powell spoke at the Economics Club of Washington. He said the disinflationary process has started. It's less noticeable in the services sector. Here, the Fed wants more progress in services ex-housing and is monitoring labour costs.
The Fed chair wasn't more aggressive than last week. The 517K print may be an outlier. It is possible that the Fed is viewing it with a pinch of salt. Powell said rates needed to rise, but this is nothing new.
The market discounted the bad news last year and is ignoring it in 2023. This is a bullish sign. Given the time value of money, markets are looking forward to 6-9 months. They are seeing a Fed pivot. Future values are also looking positive. These support present market prices.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.