Greg Gibbs, Analyst at Amplifying Global FX Capital, points out that in interviews last week, Fed Chair Powell and Vice Chair Clarida shifted the Fed’s tone on the path for rates as both acknowledged evidence of slowing global demand, and that they now have to think more about how far and how fast to raise rates.
Key Quotes
“Both Powell and Clarida were not suggesting a pause in rates was imminent, but they are now much less on auto-pilot. The economic data is clearly important, but they may also be more responsive to financial market conditions.”
“This is a distinctly different message than Powell gave the market when he said on 3 October that interest rates were still a long way from neutral.”
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