Fed Chairman Powell’s Jackson Hole speech underscored his pragmatism and willingness to adapt to shifts in the economy, according to Tim Riddell, Research Analyst at Westpac.
Key Quotes
“Strength was confirmed in this week’s second look at Q2 GDP. Sustaining this growth will be critical for the path of FOMC policy. Next week’s ISM and NFP will be of interest after Powell flagged limited wage/price pressures.”
“The approaching deadline for trade tariffs being applied to $200bn of Chinese imported goods may outweigh the progress with Mexico and now (potentially) Canada to rewrite or replace NAFTA. A harsh stance on China may lift USD initially but risk of negative feedback into US economy is rising.”
“Gov’t funding could be a near term hurdle as strains in Trump’s administration appear to be building, but his core support appears firm as mid-term electioneering is set to gain force in September. USD positioning is likely to be vulnerable as markets re-assess trade and politics.”
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