Talking Points:
- Fed Chair Jerome Powell continues to sound hawkish, supporting further policy tightening in the face of a steadily improving US economy in 2018.
- The Senate Banking Committee questioned the Fed Chair over the US-China trade war and tariffs, which were deemed to be a net-negative for the US economy.
- DXY[1] Index on pace for highest close of July thus far following Fed Chair Powell on Capitol Hill.
See our longer-term forecasts for the US Dollar, Euro[2], British Pound[3] and more with the DailyFX Trading Guides[4]
The US Dollar is hovering near its session highs in the wake of Federal Reserve Chair Jerome Powell’s testimony in front of the Senate Banking Committee. While his trip to Capitol Hill was a mostly uneventful one – indeed, nothing said could be considered much of a surprise – Fed Chair Powell has left traders feeling more bullish about the US Dollar amid signs the key policymaker is comfortable with raising rates two more times in 2018.
Noting that the US economy has grown and continues to grow at a “solid pace,” Fed Chair Powell noted that “With a strong job market, inflation close to our objective, and the risks to the outlook roughly balanced, the FOMC[5] believes that – for now – the best way forward is to keep gradually raising the federal funds rate.”
The top policymaker at the Federal Reserve likewise commented on various aspects of fiscal policy, although mostly “stayed in [his] lane” as monetary policymakers ought to generally do. While proving helpful to the economy thus far, Fed Chair Powell
