“There are many questions about the Fed right now that are arguably the most important, such as the number of rate hikes, the speed of the decline in stimulus and the balance sheet shrinking, “said John Marley, CEO of forexxtra, a London-based currency consultancy. .
The minutes, due out Wednesday, could underscore the new sensitivity of US authorities to inflation and their willingness to act. Markets have raised their bets on a possible quarter-percentage-point increase in interest rates in March and take it for granted in May.
“If the reduction in stimulus had ended a few months ago, we believe that the FOMC would be raising rates now that the unemployment rate is not much above the long-term objective of the Fed and headline and core inflation (…) they’re way over the top, “analysts at Standard Chartered said.
Federal Reserve Bank of Minneapolis Chairman Neel Kashkari said Tuesday that he expects the U.S. central bank to raise interest rates twice this year to deal with persistently high inflation, changing his long-standing view that rates should remain at zero until at least 2024.
Partial US labor data released Wednesday and nonfarm payrolls due out Friday will also be scrutinized by the market for clues on the trajectory of credit costs.
In this framework, the Japanese yen cut losses on this day to settle at 115.90 units per dollar, after hitting a five-year low on Tuesday.
Source From: Ambito
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