The US Dollar rallies as hawkish commentary from Fed officials Logan and Bowman fuels speculation of a 50bps rate hike in December, with futures pricing a 15% probability of the larger move.
A US inflation surprise has moved the December 9 FOMC debate from holding versus a 25bps hike to 25bps versus 50bps, with futures pricing up to 15% odds of a 50bps move. Hawkish comments from Logan and Bowman support higher US rates, which BBH explicitly says bodes well for USD. Paulson's more cautious stance is the main counterweight.
The US Dollar is strengthening as markets recalibrate expectations for the December 9 FOMC meeting. Following an inflation surprise, Fed funds futures now price in up to 15% odds of a 50bps rate hike, shifting the debate from a potential pause to a choice between 25bps and 50bps increases.
Stronger inflation data and hawkish Fed officials have shifted the December 9 rate debate toward either a 25bps or even a 50bps hike, with futures pricing as much as 15% odds of the larger move, which favors the dollar.
No. Philadelphia Fed President Paulson was more cautious, saying she does not currently see conditions requiring faster action, though she would act quickly if inflation expectations or wage pressures build.