HSBC economist Paul Mackel said in a report, cited by Jin10 and relayed by ChainCatcher, that this week’s Federal Reserve decision is unlikely to provide a new upside catalyst for the U.S. dollar unless the central bank unexpectedly raises interest rates. Mackel said Fed Chair Walsh has acknowledged that inflation remains above target and has reiterated a commitment to price stability. In his view, if the meeting delivers little more than that same message, the dollar is unlikely to post a sharp gain. He added that markets have already positioned for rate hikes later this year, which limits the room for a stronger reaction if the Fed merely repeats existing guidance. The comments frame the Fed meeting as a potentially muted event for the dollar unless policymakers go beyond what investors already expect.
HSBC economist Paul Mackel said in a report that this week’s Federal Reserve decision may not offer a fresh upside catalyst for the U.S. dollar unless the Fed unexpectedly raises interest rates, according to Jin10 in a report relayed by ChainCatcher.
Mackel said Fed Chair Walsh has acknowledged that inflation is running above target and has expressed a commitment to price stability. If this week’s meeting does no more than match those views, the dollar is unlikely to rise sharply, he said, because markets are already prepared for rate hikes later this year.
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