QUESTION: Put the fed Chair comments in bulleted topics with inflation, economy, employment, fed policy and “other” as the focus
Recent Economic Data:
- Ongoing progress toward dual mandate goals: maximum employment and stable prices.
Inflation:
- Inflation peaked at 7.1% in June 2022.
- Core PCE inflation, excluding food and energy, at 3.7% through September.
- Inflation readings have turned lower but still remain too high.
- Commitment to bringing inflation down sustainably to 2%.
The Labor Market:
- Strong job creation and increased worker supply.
- Labor market gradually cooling with job openings and quits returning to pre-pandemic levels.
- Wage growth showing a gradual decline.
Growth:
- Disinflation without substantially weaker economic activity.
- Economic growth has consistently surprised to the upside.
- A sustainable return to the 2% inflation goal may require a period of below-trend growth.
Geopolitical Tensions:
- Elevated geopolitical tensions pose risks to global economic activity.
- Monitoring developments for economic implications.
Monetary Policy:
- FOMC has tightened policy substantially in the past 18 months.
- Stance of policy is restrictive.
- Will keep policy restrictive until confident in achieving 2% inflation sustainably.
- Tightening may still be in the pipeline.
Financial Conditions:
- Persistent changes in financial conditions can affect monetary policy.
- Monitoring developments in financial conditions.
Conclusion:
- Commitment to returning inflation to 2% over time.
- Balancing risks of tightening too much or too little.
- Committee proceeding carefully based on incoming data, evolving outlook, and risk balance.
The market reaction:
- US rates are lower. The 10-year rate was around 4.93%. It is currently trading at 4.904%. The 2 year yield was near 5.20% is currently at 5.173%
- Stocks are higher. The Dow industrial average was down around 10 points. It is currently up around 70 points. The NASDAQ index was up around 9 points and is currently up 31 points.
In the Forex:
- EURUSD. The EURUSD initially dip below its 200 are moving average at 1.05636 but that was short-lived. The price has now shot higher and moved to the 50% midpoint of the move down from the September high at 1.06087 (and near a swing high area up to 1.0616). The price has since moved back down and currently trades at 1.0591.
- USDJPY: The USDJPY remains above the 100 hour MA after dipping toward that key technical level at 149.668. It still takes a move below that level to increase the bearish bias. ON the top side the price remains below the 150.00 level.
Technically, the NASDAQ index moved up toward the 100-hour moving average of 13389.90, and the swing area between 13364.74 to 13382.98 and found willing sellers.
See my pre-speech video on these three instruments.
This article was written by Greg Michalowski at www.forexlive.com. Source