Jerome Powell’s testimony to the US Senate did not disappoint. The Fed chairman made it very clear he and his team had noticed the improvement in the quality of data, mixed with the resilience of recent inflation data. The result was a hawkish performance where the central banker expressed a renewed desire to raise rates at a more aggressive pace than had been previously communicated at Fed announcements.
Financial markets took heed of Powell’s remarks. The greenback soared higher pushing into the $1.18 and $1.05 against the pound and euro, respectively. The gains were intense and showed no sign of easing up. Momentum now appears to be back with the buck. Jay Powell’s comments go a long way to providing fresh support for a dollar rally.
Written by Viv Savani. 8:22am, March 8th 2023
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