In his Jackson Hole delivery, Fed Chair Powell reiterated the central bank's commitment to controlling inflation. To this end, he admitted to "unfortunate costs" to economic activity and employment. But, he said, "Restoring price stability will likely require maintaining a restrictive policy stance for some time."
The Fed's preferred measure of inflation, the PCE, came in at 4.6% y-o-y, lower than last month's annualised 4.7%. However, the Fed will need to see a moderation trend before being confident of declining inflation. In response, the 2-10s yield curve weakened and remains inverted (green square). The longer this condition carries, the greater the likelihood of a recession.
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.