DXY Plummets After Powell Speech
The Dollar Index (DXY) fell >0.7% to below 98 on Friday after Fed Chairman Jerome Powell left open the possibility of an interest rate cut in his Jackson Hole speech. He assessed that unemployment remains low, but risks to the labor market are rising, while current policies remain restrictive, requiring adjustments.
Powell also highlighted shifts in tax, trade, and immigration policies that are changing the direction of the economic outlook. Markets reacted quickly: futures now price in a 91% chance of a 25 bps cut in September. Stocks and bonds rallied on expectations of easing.
Despite today's sharp correction, the dollar was virtually unchanged on the week, having previously recorded two consecutive weeks of declines. The next focus is on the release of inflation and employment data, which will validate the Fed's policy direction in the coming months. (ayu)
Source: Newsmaker.id
