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On August 3rd, Federal Reserve Chairman Williams stated that he remains optimistic that inflationary pressures will gradually ease, but if this does not happen, the Fed will not hesitate to raise interest rates to ensure that price pressures return to the target level. In an interview with Reuters last Friday, Williams said that if energy prices and trade tariffs have peaked and the economy continues its robust momentum, "I think some of the major factors that have driven up inflation over the past year and a half will no longer play such a significant role, and some of the downward pressures we have previously observed should reappear." He added, "I am watching the core inflation data very carefully over the next few months to see if it aligns with the trend of inflation moving towards and continuing to decline toward 2%, thus ensuring that we can achieve our long-term stable 2% inflation target by 2028." He also stated, "I personally predict that inflation will decline somewhat in the second half of this year and further decline next year." Williams reiterated that the current interest rate policy stance is "in a favorable position" to bring inflation back to the target level. However, he pointed out, "If we are not on track to bring inflation down to 2%... then taking action to get us back on the 2% inflation track is entirely appropriate."GameStop (GME.N) fell 3.1% in pre-market trading after the company announced it would conduct a private placement of $1.4 billion in convertible notes in exchange for shares.Note: Federal Reserves Williams gave an interview last Friday, and the interview has just been released.Federal Reserves Williams stated that investments in artificial intelligence will not pose a risk to financial stability. He is not surprised by the volatility in the AI industry.Federal Reserves Williams: Market pricing provides the Federal Reserve with valuable information.

USD/CHF Consolidates in a Range of 0.9320-0.9350 on Expectations of Rate Reversion to Neutral

Drake Hampton

Apr 08, 2022 09:57

Tips

  • USD/CHF remained stuck around 0.9350 despite a big increase in US Treasury yields.

  • The DXY is aiming for 100.00 as traders increase their expectations for an aggressive rate hike.

  • Russia resigns from the United Nations Human Rights Council.

 

Since Thursday, the USD/CHF pair has been swinging within a narrow band of 0.9318-0.9348 as Federal Reserve (Fed) policymakers have begun prescribing a reversion to neutral rates from ultra-loose monetary policy postures.

 

After commenting on the amount to which the Fed will raise interest rates in future monetary policies, members of the Fed's Monetary Policy Committee (MPC) have changed their focus to calling for a return to neutral policy. The ultra-loose monetary policies and helicopter money used to boost growth following the Covid-19 outbreak have served their purpose, and it would be preferable to return to normal rates and a self-sufficient economy. Atlanta Fed President Raphael Bostic stated on Thursday that while it is quite acceptable for the Fed to move policy closer to neutral, it should go cautiously, according to Reuters.

 

On the Russia-Ukraine front, Russia is expelled from the United Nations (UN) Human Rights Council after its members voted against the Kremlin's war crimes in Bucha, Ukraine. Additionally, US lawmakers have decided to prohibit Moscow from importing oil, gas, and coal. Additionally, the former has opted to revoke its 'Most Favored Nation' trade designation, resulting in higher tariffs for Moscow.

 

Meanwhile, the US dollar index is heading towards the enchanted level of 100.00, fueled by forecasts for better US Consumer Price Index (CPI) data next week. The yield on the 10-year US Treasury note has recaptured a three-year high of 2.66 percent as rate rise worries resurface.

USD/CHF

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