And arguably rightly so. Given the data that we have seen in the past few weeks, there is no imminent suggestion that another rate hike is needed. But considering the robustness of the US economy, we have seen firmer pricing down the road in terms of the rate path i.e. a less dovish one:
The odds of a 25 bps rate hike for September are only at ~20% currently and if the Fed wants to try to lead markets to change that, they still have time. But so far, the data is not really compelling them to and I would expect Powell to maintain the status quo in his speech later today.
Meanwhile, the timing for a rate cut is now being pushed back from as early as March next year to now around June next year instead.
And when you consider how markets are pulling back on more hawkish pricing in the ECB and BOE this week, it is no wonder why the dollar is performing well against those two currencies especially and that we are seeing key technical breaks lower at the moment.
