Is there something ECB's Lagerde:
- Had perfect monetary policy Outlook to raise rates
- if I have one regret is is that I was bound by for guidance in the past.
- Looked at inflation outlook with risks.
- Risks are more broadly balanced than a few weeks ago.
- We are not in a stagflation environment
- We are not going to let inflation genie to get out of the bottle.
- Legarde on tasks forces says it is complicated.
Fed's Warsh
- We are going to chart a new course so we can make better decisions
- There is a lot of data. I want to have a good family fight at the next meeting. Not going to give forward guidance.
- It is up to the central bank to decide if AI's inflationary
- AI below it showing itself first and very prominently in the US
- Exciting, consequential time to be a central banker.
- The US is likely to be a big winner with regard to AI.
- It is not a zero sum game. We are rooting for all countries to grow.
- We are in the first or second inning of this revolution
- I think that jobs will greater and prosperity will be stronger.
- We have a dual mandate and we after deliver on both the employment side and the price side
- Labor markets are steady.
- Supply side is steady.
- We are in a prices stability business
- We have looked around and see that prices are too high.
- Expectations of inflation have come down. Inflation risks have come down.
- We are going to deliver price stability in the US with the objective of 2%
- We will be an independent central bank.
- The most important thing we can do is get policy rate
- If communication is an obstacle, we should get rid of it.
- Volatility is down, yields are down.
- This is a rare moment to go back to first principles.
- We are creating task forces to get back to first principles. Task force leaders will be announced next week. We will get the best minds from inside and outside the US.
- Potential growth looks like it has trended.
- If last four quarters are and indication, there is reason to be optimistic
- Interest rates are the dominant means for which we should be making policy decisions
- Have not changed view on balance sheet in the first four weeks at the Fed.
- Want interest rate policy to be the key policy tool.
BOE Gov Bailey:
- We've got a softening economy, labor market
- Decision not to raise rates was based on softening economy.
- Cutting rates is off the table at the moment
- We will return to enjoy
- Energy prices have come down.
- We have a delayed reaction mechanism to energy prices.
- The jury is still out with regard to AI and employment.
- We need stronger correlation to tackle risks stemming from AI models.
- Forward guidance can become quite problematic every time
- Anything we say can be interpreted as forward guidance.
- Is there something in these markets that can cause disruptions in the market. Is there tail risks?
BOC Macklem
- We left policy rate unchanged, so yes we are comfortable where we are
- In economy, the economy is soft, but inflation is clearly above target.
- When we looked at the policy decision we think we are about at the right level to keep inflation contained.
- We have got to be humble amid uncertainty.
- If the situation changes we are prepared to take action.
- We are seeing the effects of US tariffs on exports.
- We see the tail and from the US, but also get the competitive pressures from the US.
- From financial stability point of view, stock valuations look stretched.
- Rise of hedge funds in the sovereign debt market makes you nervous that repo market disruptions could trigger rapid unwind.
Market impact:
9:18 AM. The USD is moving higher with the GBPUSD testing the 100 hour moving average at 1.32224 and 200 hour moving average at 1.32145. The price will reached 1.3220. The EURUSD trades below the lows for the week near 1.1377 and further away from the 100 hour MA at 1.1395
9:21 AM ET: premarket for US stocks are showing S&P -12 points. Dow -6.2 points. NASDAQ -200 points
9:31 AM ET: Stock markets are open. A snapshot show:
9:39 AM ET:
- Nvidia -2.96%
- Google +1.0%
- micron -6.84%
- Meta +8.22%
- Microsoft +1.43%
- Apple +0.90%
- Amazon unchanged
- AMD -4.8%
- Broadcom -1.95%
- Marvell -4.64%
- Sandisk -8.22%
9:57 AM ET; USD reverses its course.
- GBPUSD trades to a new session by after bouncing off of the 100/200 hour moving averages.
- EURUSD extends back above its 100 and 200 hour moving averages at 1.1595 and 1.1400.
- USDJPY falls to a low of 162.30. The 100 hour moving average is still below at 162.058. Nevertheless, the price is moving away from the all-time high of 162.833.
Quick summary; Forward guidance is on the back burner and a bad word. Less is more.
