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On June 20, Federal Reserve Governor Waller said the Federal Reserve could cut interest rates as early as next month. "We could do it as early as July," Waller said in an interview with CNBC on Friday. "I think we have room to lower interest rates, and then we can see what happens with inflation," he said, adding that the central bank could pause rate cuts if necessary. Wallers remarks came after Federal Reserve policymakers decided on Wednesday to keep interest rates unchanged. Officials continued to hint that they expect to cut interest rates twice by the end of 2025, based on their median forecasts. However, the dot plot also showed that seven policymakers did not expect to cut interest rates this year, indicating a clear split within the committee.Russian President Vladimir Putin: Inflation rate has returned to single digit levels this year.Israeli media reported that preliminary information showed that Iranian missiles hit Tel Aviv, the Negev region and Haifa.Russian President Vladimir Putin: Russias economic growth is not only due to the development of the military industry.On June 20, Federal Reserve Board member Waller said that he agreed that a rate cut should be considered in July, and believed that tariffs would not lead to sustained inflation. He said that tariffs would be a one-time factor and that the Fed should not wait until the job market collapsed before cutting interest rates. Waller said that the job market is currently stable, but some signs are beginning to emerge, such as high unemployment rates for recent graduates. For six months, the Fed has been waiting and watching, waiting for the inflation shock to come. Waller believes that the Fed has room to lower interest rates and then see what happens with inflation. Waller said that the Fed may be in a position to cut interest rates as early as July. Before Waller made these remarks, the market bet that the Fed had only a 14% chance of cutting interest rates in July.

AUD/USD struggles to maintain a price over 0.6720 due to risk aversion ahead of FOMC minutes

Daniel Rogers

Jan 04, 2023 14:59

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The AUD/USD pair is under pressure throughout the Asian session to maintain above the immediate resistance level of 0.6720. As the risk-aversion theme influences the Australian Dollar, it is projected that the Aussie asset will retest the round-level support at 0.6700.

 

The negative close of the S&P500 on Tuesday and the dismal performance of the 500-stock U.S. index on a larger scale highlight market participants' pessimism. On Tuesday, the US Dollar Index (DXY) turned positive after tenaciously defending the 103.00 support. In contrast, demand for US government bonds soared, leading in a decline to 3.76 percent for 10-year Treasury yields.

 

Prior to the release of the Federal Open Market Committee (FOMC) minutes, there has been a significant spike in demand for the US Dollar Index. Investors eagerly await monetary policy outlook indicators for CY2023.

 

The current tight labor market and low unemployment rate in the United States present the Federal Reserve (Fed) with a considerable challenge in its pursuit of a 2% inflation rate. A continuation of the labor market's greater monthly job gains is attracting higher employment expenses to compensate for the labor shortage, which may encourage future retail demand.

 

The Australian Dollar is failing to capitalize on Caixin Manufacturing PMI data that exceeded expectations. IHS Markit reported economic data of 49.0, which is higher than the consensus estimate of 48.8 but lower than the prior release of 49.4. The market anticipated a decline in PMI figures after detecting negative signals in China's official Manufacturing PMI data and the precarious condition of Covid-19 in China.

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