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Greg Gibbs, Analyst at Amplifying Global FX Capital, suggests that last week we saw the first signs that the Fed might be softening its tone on the path for higher rates.    

Key Quotes

“Both the Fed’s Powell and Clarida suggested that they have to be more data-dependent and pay closer attention to a range of factors from global growth indicators, liaison with business, and financial market conditions.   Both noted some increased risks from a weaker global outlook.”

“They did not go so far as to suggest that they may not go ahead with a projected hike in December, or project fewer hikes next year.   They retained a quite optimistic outlook for the US expansion.   However, the market is looking around and can see more reasons why the Fed might at least pause for breath.”

“Overall not a very enlightening speech.   It appeared to be an attempt to remain neutral and follow the led from his captain – Powell.”

“There were some dovish elements to suggest he might support a slower pace of hikes, and be amenable to an extended pause.”