Fed officials Barkin and Goolsbee support a hawkish outlook, citing persistent inflation and justifying further rate hikes, while markets await October CPI data to gauge the trajectory of US yields.
Fed officials Barkin and Goolsbee echo a more hawkish FOMC tone, citing persistent core services CPI and justifying further hikes, while the September dot plot signals one more hike followed by a hold through 2027. A hawkish Fed backdrop supports the dollar into the October CPI release. The expectation of cooling headline CPI (0.6% m/m to 0.3% m/m) could soften the move if confirmed.
The hawkish rhetoric from Barkin and Goolsbee, plus a September dot plot showing one more hike and a prolonged hold through 2027, points to higher-for-longer rates, which supports rising US yields. Markets are explicitly awaiting October CPI for its implications for US yields. If CPI comes in at the expected cooler 0.3% m/m, the upward pressure could ease.
The US Dollar gains momentum as Federal Reserve officials Barkin and Goolsbee emphasize persistent core services inflation. Markets are now focused on the upcoming October CPI release, with analysts forecasting a cooling to 0.3% m/m from the previous 0.6% m/m reading.
Fed officials Barkin and Goolsbee stressed persistent core inflation and justified future rate hikes, and the September dot plot points to one more hike followed by a hold through 2027. Higher expected US rates tend to make the dollar more attractive.
The October US CPI release, expected to show a slowdown to 0.3% m/m from 0.6% m/m, is the key event; a hotter figure would reinforce the hawkish Fed message and support higher yields.