Overall, the June FOMC meeting minutes strengthened the doubts that markets (SPY) had about the Fed’s hawkishness and added to the uncertainty about the Fed’s future course of action.
After pulling back last week, the US Dollar Index started this week on a stable note. The US Dollar Index was stable on July 4 amid quiet trading.
There was a hawkish turn in the BOE’s latest meeting, with three MPC members voting for a 0.25% rate hike, apparently worried about rising inflation.
The ECB (European Central Bank) in its recent monetary policy meeting on June 8 left its main refinancing rate at 0% and the interest rate at 0.25%.
Central banks around the globe are now preparing markets for a gradual withdrawal from accommodative monetary policies.
Hawkish comments from the Bank of England’s governor, Mark Carney, helped the British pound rally against its trading partners in the week ended June 30, 2017.
At an event in Germany, Weidmann highlighted the risks of prolonged quantitative easing.
On June 27, ECB President Draghi said that the ECB may have to change its policy to keep the central bank’s accommodative stance unchanged.
Dallas’s Federal Reserve president, Robert S. Kaplan, said that the rebound in the US economy is likely to continue for the rest of 2017.
In a recent interview with The Financial Times, the hawkish president of the Philadelphia Federal Reserve said that the Fed’s balance sheet’s unwinding could begin in September 2017.
In Eric S. Rosengren’s view, monetary policy measures become incapable of fighting future negative shocks if interest rates (AGG) are already low.
At the Illinois Bankers Association’s annual conference in Nashville, organized on June 23, 2017, St. Louis’s Federal Reserve president, James Bullard, sounded dovish about the US economy.
Chicago’s Federal Reserve president, Charles L. Evans, recently spoke at a Money Marketeers of New York University event about monetary policy challenges in a new inflation environment.
Loretta J. Mester, the president and CEO of the Cleveland Federal Reserve, spoke at the 2017 Policy Summit on Housing, Human Capital, and Inequality held on June 23, 2017.
In this series, we’ll analyze Fed members’ comments in June 2017 to better understand their outlooks on the US economy and how they justify their hawkish or dovish stances.
The Japanese yen (FXY) closed for the week ending June 23 at 111.3, depreciating against the US dollar by 0.39%.
US Treasuries (GOVT) had another roller coaster ride this week due in part to the conflicting views from Fed members and weaker-than-expected economic data.
After closing last week almost flat, the US Dollar Index started this week on a stable note. The US Dollar Index is stable and near the 97.5 level.
Last week, US Treasury yields started on a stronger note. Yields moved lower as the week progressed amid doubts about a gradual increase in interest rates.
Yields in the shorter timeframe such as the two-year yield (SHY) and T-notes (SCHO) are rising more than the ten-year or the 30-year (TLT) yields.