简体中文
繁體中文
English
Pусский
日本語
ภาษาไทย
Tiếng Việt
Bahasa Indonesia
Español
हिन्दी
Filippiiniläinen
Français
Deutsch
Português
Türkçe
한국어
العربية
Abstract:The latest Consumer Price Index (CPI) released by the U.S. reached a 13-year high at 5.4%, indicative of the severe inflation in the country.
The latest Consumer Price Index (CPI) released by the U.S. reached a 13-year high at 5.4%, indicative of the severe inflation in the country. However, Powell noted that tightening monetary policies was not urgent because of the transient inflation in the hearing of the House of Representatives, thus indicating that taking actions to suppress inflation too early would be a mistake. In addition, he implied that it was not time to scale back the bond purchase. According to a range of analyses, most analysts dont share the same view that inflation is temporary. Some hold the same opinion as I do that Powell is not credible because his view is no longer grounded in reality.
Traders have insufficient faith to go short USD even though DXY has fallen back to some extent due to the dovish messages of Powell. They are afraid of him turning to send hawkish messages as the Federal Reserve (Fed) is fully equipped to delist, according to the statistics of the American economy and inflation. Therefore, traders won‘t go short based on his word of transient inflation. When Canada and New Zealand have announced delisting with their economic and inflation statistics far lower than those of the U.S., why Powell still ignores the reality nationwide and Yellen’s hint about interest-rate hikes twice? What is his plan?
The situation may be related to the upcoming expiration of Powell‘s tenure. He may take renewal into account, whereas his performance plays an important role in the decision-making of Biden. Perhaps Powell fears that tighter monetary policies at the moment can lead the American stock to a steep slump and adversely impact the economic performance, thus continuing to claim that inflation is temporary and bluster dovish messages out. In this way, he can obtain reappointment as the bull market and economic development are maintained. The plummet of the American stock will risk Powell’s career if Biden is contemplating his renewal of the Fed chair.
According to his counselor, the president hasn‘t decided whether Powell is reappointed, reported by Reuters. The final result will be apparent if Biden only takes the performance of the financial market into account. However, he has been fully aware that the well-performed American stock market is mainly ascribed to the confidence in his upcoming policies instead of Powell’s ability. Hence, Biden may have reservations about Powell‘s competence. If all aforementioned opinions are correct, Powell won’t take real responses to the economic situation and inflation until he knows whether he can continue in office. It is worth noticing that members of the Federal Open Market Committee (FOMC) may discuss the time of delisting in the meeting of the Fed at the end of July because of exacerbating inflation. Consequently, this should be paid attention to by investors, especially those who intend to go short USD.
Disclaimer:
The views in this article only represent the author's personal views, and do not constitute investment advice on this platform. This platform does not guarantee the accuracy, completeness and timeliness of the information in the article, and will not be liable for any loss caused by the use of or reliance on the information in the article.
In the world of trading, few books have had the impact of Mark Douglas’ big hit Trading in the Zone. Written almost two decades ago, the book has become a must-read for traders looking to elevate their game to legendary status. While there is so much wisdom to be found in the book, we’ve compiled 5 of the best quotes about trading psychology that every trader should read.
Optimism has been weighing on the safe-haven dollar – but not against the euro. The common currency's failure to recover is a sign of weakness that could be followed with falls to fresh lows once the mood sours again – and there are reasons to expect that to happen sooner rather than later.
The price of EURJPY has been on a steady rise ever since it made a low of 128.808. Other currencies collapsed against the Japanese Yen two weeks ago.
A rise in the wake of a fall was seen by DXY last week ascribed to the uncertain time of delisting caused by the Federal Reserve (Fed). However, the reason for the rally of DXY last Friday is the vigorous growth of personal consumption expenditures (PCE) released by the U.S. Bureau of Economic Analysis (BEA).