The US dollar turned around in a quick move after Fed vice-chair Lael Brainard hinted at a quicker pace of rate hikes.
Here is the full text of the most important part of her speech:
Looking forward, at every meeting, we will have the opportunity to calibrate the appropriate pace of firming through the policy rate to reflect what the incoming data tell us about the outlook and the balance of risks. For today, every indicator of longer-term inflation expectations lies within the range of historical values consistent with our 2 percent target. On the other side, I am attentive to signals from the yield curve at different horizons and from other data that might suggest increased downside risks to activity. Currently, inflation is much too high and is subject to upside risks. The Committee is prepared to take stronger action if indicators of inflation and inflation expectations indicate that such action is warranted. We are committed to bringing inflation back down to its 2 percent target, recognizing that stable low inflation is vital to maintaining a strong economy and a labor market that works for everyone.
The market has pushed up pricing for a 50 bps hike to 81% from 72% on this.
The FX impact is clearest in USD/JPY, which is up to 123.29 from 122.90 beforehand. There are similar-sized 30 pip moves in the dollar across the board.
In bonds, US 2-year yields are up 7 bps at 2.499% while 10-year yields are up 11 bps to 2.52%.
What's most-notable about these comments are who said them, not the content. Brainard is a dove and her openness to hikes suggests that the more-hawkish FOMC members will be pushing hard.