Fed chair Powell to undertake a extra cautious method at Jackson Gap – MUFG

MUFG notes that the Jackson Gap Symposium would be the subsequent high-stakes occasion for the Fed by way of providing up any coverage communication. And given the circumstances, a repeat of final 12 months – the place a dovish steerage was specific – is fairly unlikely. The agency notes that Fed chair Powell is anticipated to lean on the cautious aspect and that can mood draw back pressures on the US greenback within the near-term.

In addition they notice that markets are pricing within the resumption of coverage easing by the Fed and can look to Powell to validate these expectations. Nonetheless, Powell could not select to substantiate the timing and purchase extra time to evaluate incoming information. If that’s the case, that would dampen draw back pressures towards the greenback with markets having to reassess their pricing on price cuts.

The narrative right here suits with the commentary from yesterday: Jackson Gap on the horizon for markets this week

This text was written by Justin Low at investinglive.com.