Fed’s Bullard, who shook the markets to their core earlier on the following his comments that argued a 50 bp cut would be too much in July, has now said that he thinks 2 rate cuts by year-end would provide a soft landing
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Fed’s Bullard: 50 basis points rate cut in July would be overdone
FX implications:
Markets are monitoring every word that Fed speakers are coming out with since the last Fed meeting. There was an immediate 25 point move in the DXY following Bullard’s comment and then, Fed Chairman Jerome Powell also dampened expectations of an uber-dovish Fed for the rest of this year. Powell said the rate-setting Federal Open Market Committee was “grappling with is whether these uncertainties will continue to weigh on the outlook and thus call for additional policy accommodation,” in prepared remarks. He also stated that the amount of tariffs currently in place are not large enough to [directly] have an economic impact, but the uncertainty they bring is impacting the confidence of financial and agricultural markets.
Possible more to come from Bullard…