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Federal Reserves Logan: Short-term political factors are not taken into account when setting interest rates.The Federal Reserve accepted a total of $1.447 billion from five counterparties in its fixed-rate reverse repurchase operations.According to CNBC, Alphabet raised $11 billion in a European bond offering, bringing its total global debt offerings to over $30 billion.On February 11th, Federal Reserve official Logan stated on Tuesday that she is "cautiously optimistic" that the Feds current policy rate level can push inflation back to the 2% target while maintaining a stable job market. Economic data in the coming months will test this assessment. Logan stated, "If this happens, it would indicate that our current policy stance is appropriate and that we dont need to cut rates further to achieve our dual mandate." However, she added that if inflation falls while the labor market cools significantly, "further rate cuts might become appropriate. Right now, however, Im more concerned that inflation remains stubbornly high." She noted that after three rate cuts last year, downside risks to the labor market "appear to have eased significantly," but this has also introduced additional risks to inflation. She pointed out that with short-term borrowing costs already in what is widely considered a "neutral" policy range, current interest rates have limited restraining effect on the already strongly rebounding economy and inflation that has consistently exceeded the Feds target for nearly five years. Logan expects inflation to make progress this year, with some initial signs of improvement already observed.Federal Reserves Logan: A central clearing mechanism should be provided for the Feds standing repurchase facility.

EUR/USD Is Anticipated To Fall Below 1.0950 Due To Market Optimism Regarding US Economic Prospects

Daniel Rogers

Apr 20, 2023 13:54

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The EUR/USD pair is expected to decline drastically below the near-term support level of 1.0950 during the Asian session. The major currency pair is attracting bids as the US Dollar Index (DXY) has shown a recovery move and surpassed the 102.00 level of resistance.

 

S&P500 futures have extended their losses during the Asian session in anticipation of the Federal Reserve's (Fed) decision to raise interest rates, which could undermine revenue guidance.

 

According to the Federal Reserve's (Fed) Beige Book minutes, economic activity is stable in the majority of districts. However, loans and advances to businesses and consumers have decreased due to stringent credit conditions imposed by commercial banks in the United States in order to prevent uncertainty in an unstable environment.

 

In the interim, Fed policymakers remain optimistic regarding the economic prognosis due to the labor market's tightness. As reported by Reuters, the president of the Federal Reserve Bank of St. Louis, James Bullard, advocated for the continuation of the central bank's policy tightening in view of the continued strength of labor market data. A Fed official added that the demand for labor has not yet diminished and that a robust labor market results in robust consumer spending.

 

Citi Group forecasts a fourth-quarter recession in the US economy due to the constrained US labor market. Previously, it was anticipated that the United States would enter a recession during the third quarter of 2023.

 

Investors are anticipating the release of Eurozone Consumer Confidence data. Preliminary Consumer Confidence (April) data is anticipated to improve from -19.2 to -18.5. This may be the result of persistently declining inflation in the Eurozone, which reduces the burden on households.


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