- The DXY is experiencing a time correction as bulls are gearing up for further upside
- Fed’s Bullard has dictated a target of 3.5% interest rates this year.
- Also, the FOMC member has opened doors for a 75 bps rate hike by the Fed.
The US dollar index (DXY) went into a time correction in the late New York session after hitting a high of 100.86. The hawkish stances of the Federal Reserve (Fed) policymakers are keeping the asset ascending as investors are pouring their funds into the safe-haven assets amid inflation concerns. As quickly as we are approaching the announcement of the interest rate decision by the Fed, which is due in May, bets over an aggressive interest rate hike are increasing firmly.
FOMC Member James Bullard’s speech
St. Louis Fed President James Bullard in his speech on Monday has stated that 3.5% is the minimum Fed policy rate need to be achieved this year. To consider the achievement of a 3.5% interest rate, the Fed would require raising its rate by 50 basis points (bps) each time in its six monetary policies. The Federal Open Market Committee (FOMC) member has cleared that inflation is far too high from the comfort and a 75 bps rate hike cannot be ruled out, however, the base case is not for more than 50 bps at any monetary policy committee (MPC) meet.
Key events this week: Building Permits, Housing Starts, Initial Jobless Claims, and S&P Global PMI.
Eminent issues on the back boiler: Russia-Ukraine Peace Talks, International Monetary Fund (IMF) meeting, People’s Bank of China (PBOC) interest rate decision Fed Chair Jerome Powell speech, and Bank of England (BOE) Governor Andrew Bailey speech.