Search ForexCrunch

James Bullard, the Chief Executive Officer and 12th President of the Federal Reserve Bank of St. Louis, recently crossed wires, via Reuters, while turning down odds of any further rate cuts by the US Federal Reserve during the current month.

Key quotes

Will not prejudge outcome of the March policy meeting.

A barrier to cutting rates again in March is the action just taken, would need to cite data justifying a further rate reduction.

Does not want market to over focus on march meeting so there will not be much new information in hand.

Fed has plenty of flexibility and has shown it can act between meetings in volatile situations.

Optimistic the US can handle virus outbreak effectively.

When asked about effectiveness of Fed rate move, the Fed member notes ‘a person can buy a car sitting in their kitchen’ with online tools.

Fed has insured against a “fairly large outbreak,” further action by fed would require worse-than-expected virus spread.

Fed’s local business contacts will play a particularly important role in tracking economic impact of coronavirus.

FX implications

Earlier during the day, Goldman Sachs cited increasing odds of another rate cut from the Fed during its March 18 meeting. Hence, the Fed policymakers’ comments offered the additional strength to the US dollar while also favored further risk recovery. That said, the USD/JPY remains 0.07% positive to 107.60 by the press time of early Thursday morning in Asia.