Fed’s Jefferson signals patience as next rate move stays data-driven

The Vice Chairman of the Federal Reserve, Philip Jefferson, is on the wires, saying that the “Fed is fully committed to returning inflation to 2% target” and that future interest rate decisions “should be driven by data.”

Jefferson added that the Fed “may take more time to decide the next rate move,” echoing comments of the New York Fed President John Williams on Wednesday, who said that the Fed is in no rush to tighten monetary policy.

Key highlights:

Fed is fully committed to returning inflation to 2% target

Future fed rate changes should be driven by the data

Says us central bank 'may take more time' to decide next rate move

Weighing more data will allow fed to make better call on rates

Economic output and job market are broadly SOLID

Bond yields show market participants rethinking outlook

September rate hike will help anchor inflation expectations

Inflation remains above target with upside risks

Says he still expects inflation pressure to ease over longer term

Sees jobless rate holding steady into end of this year

Says he is worried high inflation could spill into expectations

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

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 Euro.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.89%	0.56%	0.28%	0.08%	0.34%	0.57%	-0.45%
EUR	-0.89%		-0.34%	-0.64%	-0.85%	-0.56%	-0.35%	-1.34%
GBP	-0.56%	0.34%		-0.29%	-0.48%	-0.22%	-0.00%	-1.00%
JPY	-0.28%	0.64%	0.29%		-0.21%	0.06%	0.27%	-0.74%
CAD	-0.08%	0.85%	0.48%	0.21%		0.27%	0.48%	-0.52%
AUD	-0.34%	0.56%	0.22%	-0.06%	-0.27%		0.24%	-0.77%
NZD	-0.57%	0.35%	0.00%	-0.27%	-0.48%	-0.24%		-0.98%
CHF	0.45%	1.34%	1.00%	0.74%	0.52%	0.77%	0.98%

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

What does the Federal Reserve do, how does it impact the US Dollar?

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.

How often does the Fed hold monetary policy meetings?

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.

What is Quantitative Easing (QE) and how does it impact USD?

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.

What is Quantitative Tightening (QT) and how does it impact 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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