Michael Woolfolk
Michael Woolfolk
below continue data fed labor likely market raising rates remains services support view
February's data support the view that the U.S. labor market remains strong, particularly on the services side, with unemployment solidly below the 5% level. The Fed is likely to continue raising rates for the foreseeable future.
above capacity fed further given high increases last later levels low march raise rates recent release report
Given recent Fed warnings over high levels of capacity utilization and low levels of unemployment, today's report increases the probability that the Fed will raise rates above 5.0% later this year. Last Friday's release of March unemployment further buttresses this view.
dollar fed home increase interest less likely sales trend
Were this trend in new home sales to continue, the Fed will be less likely to increase interest rates, which would be a dollar negative.
above argue conditions dollar federal funds growth later rate strong target tight viewed
Strong growth and tight labor-market conditions argue for preemptive tightening that could very well take the federal funds target rate above 5% later this year. This is viewed as a dollar positive.
dollar fed markets trend until
We won't see the dollar embarking on any new trend until the markets get a better sense of where the Fed is headed.
dollar faster fed giving itself later pace positive raise rates removal room word
The removal of the word 'measured' ... would be positive for the dollar as it suggests that the Fed is giving itself room to raise rates at a faster pace later this year.
continue economic expected fed heads interest political rates report rising risk strength underlying
The monthly GDP report fed into underlying CAD strength. With political risk subsiding, rising interest rates and fundamental economic strength are prompting CAD buying, which is expected to continue through year-end as USD/CAD heads for the 1.10 mark.
change consistent data fed
Our Fed watchers say there's a consistent story that the Fed is one and done. Today's data doesn't change this story.
bank canadian continues dollar federal hike narrow rates reserve
If the Bank of Canadian continues to hike rates after the Federal Reserve pauses, it will narrow the rate differential between the two. This will make the Canadian dollar more favorable.
continue dips fed indicate inflation likely raise wage
If unemployment dips any lower, that may indicate some wage inflation and the Fed will likely continue to raise rates.
dollar fed interest looks provide rate supporting time until
Interest rate differentials are supporting the U.S. dollar for the time being. Until the Fed pauses, it looks that's going to provide support for dollar bulls.
door fed future hikes left open positive rate
The door will be left open for future rate hikes but the Fed will be increasingly data-dependent. That's positive for the U.S. dollar.
anecdotal due evidence floor flows greater impact level lighter lower market point seeing trading
Anecdotal evidence on the trading floor indicates things have been lighter than at any other point in the week. You are seeing some one-off flows that are making a greater impact in the market due to this lower level of liquidity and volume.
benign canadian dollar inflation
Benign inflation has weakened the Canadian dollar a little bit.