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Abstract:With inflation risks skewed to the upside, the Fed is likely to continue to front-load interest rate increases in the coming months, even if the aggressive tightening cycle triggers a painful recession. Indeed, policymakers are now less concerned about the rapidly deteriorating growth profile and appear to be prioritizing the price stability portion of their mandate.
BULLISH OUTLOOK FOR THE US DOLLAR
The US dollar, as measured by the DXY index, has had another solid week, aided by increased Treasury yields.
Bond rates rise in response to higher-than-expected inflation in the United States. CPI figures
Stubbornly high inflationary pressures will keep the Fed on pace to raise interest rates further, bolstering the currency.
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