Fed set to cement USD support – MUFG

The US dollar gained across G10 last week. The Jackson Hole Symposium at th end of the week is set to reinforce a tougher Fed’s rhetoric, providing further support to the US dollar, economists at MUFG Bank report.

Jackson Hole to reinforce recent comment

“The 2-year UST bond yield has rebounded in response to the tougher rhetoric with a number of Fed speakers dismissing the idea of a pause or pivot any time soon. It seems quite likely that the Jackson Hole Symposium at the end of this week will be used to reiterate this message to the financial markets.”

“We are set to see the Fed fuel further yield curve inversion with the Fed slow in acknowledging that the inflation battle is won and showing a willingness to forgo growth in order to bring inflation down more quickly.”