FED Doves Aren’t Pushing for More Cuts Now
The FED has been dovish since summer last year, but now even doves like Bullard are turning less dovish
The FED turned quite dovish last year, cutting interest rates three times, after being hawkish for several years. The global economy weakened considerably due to the trade war between US and China and the US economy was affected by it as well.
So, the FED has been bearish since last summer, but it seems like they might be shifting their stance now. Bullard was speaking a while ago and his comments sounded more hawkish than dovish. He doesn’t have a vote at the FED, but his opinion matters nonetheless. Below are some of his main comments:
- Low probability that virus outbreak will get much worse
- Market expectations likely to return to “on hold” outlook
- Fed is in great shape, don’t have to lower rates
- Have been concerned by yield curve issues
- Fed purchases in repo market are not QE
Well, if a dove isn’t looking for a rate cut, then that does say a bit on the Fed’s current stance. Then again, Bullard isn’t a voting member on the committee this year. But again, his opinion makes up the total at the FED and if they are shifting towards more hawkish, then the USD should remain bullish in the coming months.
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