Fed’s Hammack sees thriving economy, backs further rate hikes
Cleveland Fed President Beth Hammack said that further tightening is needed but reiterated earlier remarks that she is open “to adjusting the pace of rate increases.”
Hammack commented that inflationary pressures spread beyond Artificial Intelligence (AI), and that “other companies are also performing well and are prepared to invest.” She added that business contacts sound more like the economy is “thriving.”
Key highlight:
More tightening needed but open to adjusting pace of rate increases
Inflation pressures spreading beyond Al, with other companies also performing well and prepared to invest
Don’t want to deter growth but may need to ease it back a bit
Business contacts sounding more like economy is thriving than about to slow down
Policy curbs will need to reduce demand via capital spending or consumption
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.41% | 0.19% | 0.19% | 0.17% | 0.35% | 0.42% | 0.53% | |
| EUR | -0.41% | -0.24% | -0.25% | -0.23% | -0.08% | 0.07% | 0.11% | |
| GBP | -0.19% | 0.24% | 0.02% | -0.04% | 0.14% | 0.30% | 0.33% | |
| JPY | -0.19% | 0.25% | -0.02% | -0.05% | 0.14% | 0.27% | 0.32% | |
| CAD | -0.17% | 0.23% | 0.04% | 0.05% | 0.17% | 0.27% | 0.35% | |
| AUD | -0.35% | 0.08% | -0.14% | -0.14% | -0.17% | 0.15% | 0.17% | |
| NZD | -0.42% | -0.07% | -0.30% | -0.27% | -0.27% | -0.15% | 0.04% | |
| CHF | -0.53% | -0.11% | -0.33% | -0.32% | -0.35% | -0.17% | -0.04% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
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