GBP/USD Remains Flat in Tokyo Amid Short Squeeze Rally
Even though the data showed that the US economy expanded by 2% in Q1 with personal consumption spending up 4.2%, inflation remains a concern with the GDP Price Index and the core inflation measure increasing by 4.0% and 4.9%, respectively.
Morgan Stanley (MS) forecasts a 25 basis point hike and a conditional pause from the Federal Open Market Committee at their upcoming meeting next week, which has investors’ full attention. However, recent stress in the banking system may present a challenge for hawks in the United States central bank. However, a strong labour market and high inflation lend credence to the May hike thesis, leading MS to predict that the meeting “is likely to represent a turning point in the monetary policy tightening cycle.”
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