U.S. Federal Reserve Chairman Jerome Powell will participate in the Perspectives on Monetary Policy panel before the Thomas Laubach Research Conference hosted by the Federal Reserve Board of Governors on May 19. The market expects a pause or hawkish pause, but Fed officials are more inclined towards raising interest rates.
Before Jerome Powell’s speech, Federal Reserve Bank of New York President John Wiliams and Federal Reserve Board Governor Michelle Bowman shared their monetary policy outlook. Bowman has pushed back against a broad overhaul of banking rules, but agrees with the need for more interest rate hikes to curb the inflation rate to its target. Williams agrees with more rate hikes.
Fed officials including Dallas Fed President Lorie Logan and Fed Governor Philip Jefferson said on Thursday that inflation is still too high and data doesn’t justify pausing a rate hike in June. Moreover, Cleveland Fed President Loretta Mester said Tuesday that the central bank is not yet at the point where it can “hold” rates.
US jobless claims have decreased to 242,000 from 264,000 the previous week, indicating the labor market remains tight. It offered the Federal Reserve an opportunity to implement further interest rate hikes in its efforts to combat inflation.
Bank of England’s Jonathan Haskel believes the jobs market is tight and quantitative tightening may increase to curb inflation. Last week’s 12th rate rise by BOE by another 25 bps signals a strong message amid weak economic data.
Moreover, ECB’s Isabel Schnabel has been direct about the European Central Bank’s aim to keep raising borrowing costs until core inflation reaches 2%.
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Bitcoin Prices To Fall Lower After Fed Chair Powell Speech
Equity markets are edging higher as investors remain optimistic that a deal on the US debt ceiling could be reached this weekend or next week.
The US dollar index (DXY) moves around 103.4, after touching a two-month high of 103.6 on Thursday after jobless claims fall. Moreover, CME FedWatch indicates a 45% probability of another 25 bps, which rose from 15% last week as Fed officials adhere to raising rates further.
BTC price fell 2% in the last 24 hours, with the price currently trading near $26,800. The 24-hour low and high are $26,415 and $27,466, respectively. Whales and miners are selling their BTC holdings in anticipation of fall in BTC price due to macro.
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