Investing.com - The U.S. dollar fell on Wednesday after Federal Reserve Chairman Jerome Powell signaled a readiness to cut interest rates in response to "uncertainty" over the outlook for the U.S. economy.
The prepared testimony was released by the Fed ahead of Powell’s at the House Committee on Financial Services. Powell will elaborate on the comments later in the day.
"Apparent progress on trade turned to greater uncertainty, and our contacts in business and agriculture reported heightened concerns over trade developments," Powell said, noting that business investment, an important component of economic growth, "seems to have slowed notably" in recent months.
The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell around a quarter of a percent following the release, extending the slight losses it had made earlier in the day. The greenback traded at 96.76 by 9:44 AM ET (13:44 GMT), compared to 97.07 ahead of the release.
Powell indicated that overall growth has "moderated" and said "there is a risk that weak inflation will be even more persistent than we currently anticipate."
The Fed chief's remarks were taken to imply that the U.S. central bank would be open to the 25 basis point cut that markets currently price in for the July 30-31 meeting.
"Powell's dovishness took me by surprise as it's hard to understand how he can say that uncertainty has increased since the Fed's June policy meeting," Investing.com analyst Jesse Cohen said. "We got good news on the U.S.-China and U.S.-Mexico trade fronts as well as a strong jobs report... only thing that seemed to rise in uncertainty since June was Powell's job security."
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure
here or
remove ads
.
Gregory Daco, chief U.S. economist with Capital Economics, compared a 25 basis point move at the end of the month to an "immunization shot", which could be followed in September by another 25 basis point "booster shot" if the U.S. data on inflation and employment, along with the global economy, fail to respond.
It seems like the Fed will deliver 25bp "immunization shot" in July Whether we see 25bp "booster shot" in September will depend on global growth,
#trade dev,
#inflation & labor market
It seems like the Fed will deliver 25bp "immunization shot" in July Whether we see 25bp "booster shot" in September will depend on global growth,
#trade dev,
#inflation & labor market
Powell's dovishness took me by surprise. It's hard to understand how he can say that uncertainty has increased since the Fed's June policy meeting. We got good news on the U.S.-China and U.S.-Mexico trade fronts as well as a strong jobs report. Only thing that seemed to rise in uncertainty since June was Powell's job security.
Powell's dovishness took me by surprise. It's hard to understand how he can say that uncertainty has increased since the Fed's June policy meeting. We got good news on the U.S.-China and U.S.-Mexico trade fronts as well as a strong jobs report. Only thing that seemed to rise in uncertainty since June was Powell's job security.
Powell's dovishness took me by surprise. It's hard to understand how he can say that uncertainty has increased since the Fed's June policy meeting. We got good news on the U.S.-China and U.S.-Mexico trade fronts as well as a strong jobs report. Only thing that seemed to rise in uncertainty since June was Powell's job security.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure
here or
remove ads
.
Powell's dovishness took me by surprise. It's hard to understand how he can say that uncertainty has increased since the Fed's June policy meeting. We got good news on the U.S.-China and U.S.-Mexico trade fronts as well as a strong jobs report. Only thing that seemed to rise in uncertainty since June was Powell's job security.
Powell's dovishness took me by surprise. It's hard to understand how he can say that uncertainty has increased since the Fed's June policy meeting. We got good news on the U.S.-China and U.S.-Mexico trade fronts as well as a strong jobs report. Only thing that seemed to rise in uncertainty since June was Powell's job security.
Powell's dovishness took me by surprise. It's hard to understand how he can say that uncertainty has increased since the Fed's June policy meeting. We got good news on the U.S.-China and U.S.-Mexico trade fronts as well as a strong jobs report. Only thing that seemed to rise in uncertainty since June was Powell's job security.
Powell's dovishness took me by surprise. It's hard to understand how he can say that uncertainty has increased since the Fed's June policy meeting. We got good news on the U.S.-China and U.S.-Mexico trade fronts as well as a strong jobs report. Only thing that seemed to rise in uncertainty since June was Powell's job security.
Powell's dovishness took me by surprise. It's hard to understand how he can say that uncertainty has increased since the Fed's June policy meeting. We got good news on the U.S.-China and U.S.-Mexico trade fronts as well as a strong jobs report. Only thing that seemed to rise in uncertainty since June was Powell's job security.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure
here or
remove ads
.
Powell's dovishness took me by surprise. It's hard to understand how he can say that uncertainty has increased since the Fed's June policy meeting. We got good news on the U.S.-China and U.S.-Mexico trade fronts as well as a strong jobs report. Only thing that seemed to rise in uncertainty since June was Powell's job security.
Powell's dovishness took me by surprise. It's hard to understand how he can say that uncertainty has increased since the Fed's June policy meeting. We got good news on the U.S.-China and U.S.-Mexico trade fronts as well as a strong jobs report. Only thing that seemed to rise in uncertainty since June was Powell's job security.
Powell's dovishness took me by surprise. It's hard to understand how he can say that uncertainty has increased since the Fed's June policy meeting. We got good news on the U.S.-China and U.S.-Mexico trade fronts as well as a strong jobs report. Only thing that seemed to rise in uncertainty since June was Powell's job security.
Powell's dovishness took me by surprise. It's hard to understand how he can say that uncertainty has increased since the Fed's June policy meeting. We got good news on the U.S.-China and U.S.-Mexico trade fronts as well as a strong jobs report. Only thing that seemed to rise in uncertainty since June was Powell's job security.
Powell's dovishness took me by surprise. It's hard to understand how he can say that uncertainty has increased since the Fed's June policy meeting. We got good news on the U.S.-China and U.S.-Mexico trade fronts as well as a strong jobs report. Only thing that seemed to rise in uncertainty since June was Powell's job security.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure
here or
remove ads
.
