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Federal Reserve Chairman Warsh: We don’t want to get involved in bailouts; we want to be in a position where we don’t need to bail out any entities.On July 14th, Federal Reserve Chairman Warsh reiterated his commitment not to provide forward guidance on interest rates during a hearing, with his testimony barely touching on interest rate policy. Warsh stated that the Fed is firmly committed to maintaining price stability and pushing inflation back to its 2% target, while emphasizing that the Fed possesses the policy tools needed to achieve this goal. He stated, "The more focused we are on our responsibilities, the further we can stay away from politics." Warsh also said that the Fed will re-examine its inflation framework to gain a deeper understanding of the factors driving inflation and what measures can be taken to address it. Regarding the Feds newly established working groups, Warsh stated that these groups are still in the research and exploration phase. He pointed out that discussions will initially take place among the 19 policymakers, and the entire process will be open and transparent, with research findings and policy ideas being shared regularly. On balance sheet policy, Warsh emphasized that the balance sheet is part of monetary policy, not just a matter of financial market operations. Any adjustments to balance sheet policy will be fully communicated and explained in advance, giving the market sufficient preparation time. When asked how he would respond if Trump attempted to interfere with Federal Reserve policy, Warsh responded that he would continue to fulfill his duties and insist on setting monetary policy independently. He stated that the Federal Reserve has already demonstrated its commitment to policy independence and institutional reform.Federal Reserve Chairman Warsh: More efforts are needed to combat inflation.Federal Reserve Chairman Warsh: We still have some work to do on inflation.Federal Reserve Chairman Warsh: The Fed’s dual mandates are not in conflict.

USD/CHF Steady at 1.0020 as DXY Pauses, Powell and US Retail Sales Take Center Stage

Daniel Rogers

May 16, 2022 10:46

The USD/CHF pair is bouncing within a small range between 1.0020 and 1.0030 in early Tokyo, as the US dollar index (DXY) is not gaining much traction due to Monday's light economic calendar. Although broad-based fundamentals continue to favor the dollar bulls, the Federal Reserve (Fed) is projected to raise interest rates by another significant number in June in an effort to limit the inflation issue.

 

Last week, Fed's Powell's interview with the national radio show Marketplace revealed the ongoing conversations among Fed policymakers regarding anticipated rate hikes in monetary policies. Fed Powell indicated that the Fed could declare two additional rate hikes in the next two consecutive monetary policy sessions in order to tame the soaring inflation.

 

In the meantime, the US dollar index (DXY) is poised between 104.46 and 104.60 after reaching a new 19-year high of 105.00 on Friday. The DXY appreciates the broader gains but requires further triggers to maintain strong. In the future, two significant events on Tuesday will keep investors occupied. First will be Fed Chairman Powell's speech, which will likely influence monetary policy action in June. The second significant event is the monthly US Retail Sales report, which is anticipated to increase by 0.7% from the previous reading of 0.5%.

 

In terms of the Swiss franc, Friday's Industrial Production data will be the focal point. The catalyst reached 7.3% the previous time. A greater-than-anticipated number will strengthen the Swiss franc against the U.S. dollar. 

USD/CHF

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