Powell Leaves the USD on An Uptrend As It Was

The Jackson Hole Summit is finally over and we’re back to a normal market, trading the news, more or less where we were before. Expectations were high for this meeting but it didn’t produce much after all. There was some volatility during Powell’s speech, but markets settled pretty fast so nothing substantially changed.

The FED brought back the economic data dependency in the last FOMC meeting and Powell repeated a similar stance on Friday afternoon. He left the future of the monetary policy on the economic data, which leaves all options open, giving them more room to breathe. In the end, the USD closed the day and the week on a bullish note and it seems like it will close AUgust in the same manner after Powell’s speech left everything where it was.

Comments From FED Chairman Jerome Powell at Jackson Hole

• Fed will proceed ‘carefully’ when deciding to hike again or hold steady
• Will decide next moves based on data
• Fed attentive to signs economy not cooling as expected
• Economic uncertainty calls for ‘agile’ monetary policy making
• Inflation remains too high
• Two months of good data are only the beginning of what we need to see to build confidence on inflation path
• Policy is restrictive but Fed can’t be certain what neutral rate level is
• Fed will not change 2% target
• Lowering inflation also likely to require a softer labor markets
• Signs job market not cooling could also warrant more Fed action
• Sees evidence inflation becoming more responsive to labor market
• Full text