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Federal Reserves Williams: The unemployment rate is expected to gradually decline to 4% by 2028.Federal Reserves Williams: Overall inflation is expected to fall to about 3.25% by the end of the year and continue to move toward the 2% target in 2027, reaching the target in 2028.July 15th - As inflation puts pressure on American household budgets, a growing number of people are saying theyre using credit card reward points to buy everyday necessities, from gasoline to cat litter. A survey by the USAA Federal Savings Bank shows that over 35% of more than 1,000 respondents said they use credit card reward points for "everyday expenses." Furthermore, points redemption services are also popular, with 79% of respondents saying theyve used points at least once in the past six months. The results indicate that persistent inflation is squeezing household budgets. Since mid-2023, grocery prices have risen by more than 6%, and gasoline prices have increased by about 30 cents per gallon. Meanwhile, inflation-adjusted wages have risen by an average of about 1.4% annually over the same period. "With the cost of living rising, practicality is becoming a primary consideration," said USAA Federal Savings Bank President Moran. "More and more families are reassessing their finances and prioritizing immediate needs." Moran stated that consumers are shifting their spending focus from "non-emergency purchases" such as appliances and furniture to necessities like food and gasoline. They also adopted the same strategy when using credit card points, using points to extend their budget in order to help offset the effects of rising prices.July 15th - Bank of Americas July global fund manager survey shows that investors continue to believe the US dollar and British pound are overvalued, but now consider the euro undervalued. A net 34% of investors believe the US dollar is overvalued, unchanged from last months survey; a net 12% believe the British pound is overvalued, down from 15% last month; and a net 10% believe the euro is undervalued, compared to a neutral level last month.International oil prices remained volatile, with Brent crude holding steady above $84. A chart provides a quick overview of the pre-market conversion prices of crude oil between domestic and international markets.

GBP/USD seeks to regain 1.2300 as higher UK CPI strengthens the case for a rate hike by the Bank of England and the USD retreats

Alina Haynes

Mar 23, 2023 15:00

 GBP:USD.png

 

During the Asian session, the GBP/USD pair attempts to reclaim the resistance level at 1.2300. Following a vertical correction, the Cable has recovered to near 1.2260 as the market anticipates that the absence of hawkish interest rate guidance from Federal Reserve (Fed) chair Jerome Powell while addressing the economy at the monetary policy meeting indicates that the Fed is close to ending its policy-tightening spell.

 

S&P500 futures have generated some gains in the Asian session following a decline on Wednesday as a result of Fed Powell's confirmation that the fight against intractable U.S. inflation will continue. Chairman of the Federal Reserve Jerome Powell has ruled out rate cuts in 2023, citing the difficulty of controlling inflation. In addition, US Treasury Secretary Janet Yellen's statement that the government "does not plan to insure all uninsured bank deposits" heightened fears of a banking sector collapse.

 

Following a recovery move, the US Dollar Index (DXY) has retreated on expectations that additional credit tightening to protect banking institutions will reduce overall demand, economic activity, and inflation. In the interim, the demand for US government bonds has increased as a result of expectations that US Janet Yellen will end further policy restrictions and reduce support for all bank deposits.

 

On the front of the United Kingdom, the Pound Sterling is likely to maintain its strength as the Bank of England (BoE) is scheduled to raise rates for the eleventh consecutive time. Governor Andrew Bailey of the Bank of England is expected to raise interest rates by 25 basis points (bp) in response to rising food and non-alcoholic beverage prices, as well as rising energy costs, which have contributed to inflation in the United Kingdom.

 

In the midst of global banking turmoil, the Bank of England's (BoE) interest rate decision will be difficult, as policymakers were divided over whether to raise rates further or maintain them at their present level.


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