The hawkish rhetoric of some Fed members reactivates the US dollar rally. The Dollar Index it shot up to six-week highs, while the EurUsd moved closer to parity and slipped below the important 1.01 threshold (hit a low of 1.007 this morning).
Yesterday several members of the Fed spoke and in particular the hawk James Bullard he is inclined to vote for a further 75bp hike in September as there are relatively positive indications from the economy and very high inflation. Similar positions from non-voter Daly who said it was too early to declare victory over inflation and therefore a 50-75bp hike in September might be appropriate. Different tones are those of Kashkari of the Minneapolis Fed who believes that the rate hike process will hold back the economy, making a possible recession more likely.
Meanwhile, expectations for the Jackson Hall Symposium August 25-27with Fed Chairman Jerome Powell, who will speak on Friday the 26th.