The market-moving news this week had to do with the prospects for another Fed rate increase. The information was delivered to the great unwashed via the “Fed Minutes Release” on Wednesday, where it sure sounded like more rate increases were already baked into the Fed’s cake:
Fed sees interest rate hikes continuing until inflation eases substantially, minutes show (Source)
“With inflation remaining well above the Committee’s objective, participants judged that moving to a restrictive stance of policy was required to meet the Committee’s legislative mandate to promote maximum employment and price stability,” the minutes said.
But what about President Grandpa’s claim that inflation was 0%? Someone should tell “the Committee” at the Fed that they’re spreading “economic disinformation.”
The futures markets still point to a 50 basis point rate increase for September, and another 50 bp rate increase for November (Source). So, from this viewpoint, not much has changed.
Movements in the currencies were not directly tied to the minutes release which occurred on the 17th; the buck’s big moves happened on Monday, Thursday, and Friday, rising a huge 2.45% for the week, and closing at a new weekly closing high of 1.08, a level not seen since 2002. The dollar’s 4-week “pivot-driven correction” appears to be over.
For its part, the Euro fell to 1.004, dropping 2.08%. A close below 1.00 would be an ugly signal for the Euro, which hasn’t been there since 2002. We are not very far away from a breakdown. So, how’s the “peace in Ukraine” coming?
by randommike 
