The Fed chairman did not specify when to suggest a possibility of interest rate cuts
✔️ Federal Reserve Chairman Powell's Remarks
US Federal Reserve (Fed) Chairman Powell expressed recognition in the question and answer session after the lecture held in Washington on 7/15 that inflation and economic activity were decelerating as expected by the Fed. However, they avoided making clear statements about interest rate cuts at the Federal Open Market Committee (FOMC) at the end of this month, and emphasized that there was no intention of sending signals about specific meetings. Chairman Powell has indicated a policy to make policy decisions while judging the situation at each meeting.
✔️ Market impact and dollar to yen outlook
Chairman Powell's remarks have given uncertainty to the market. While the possibility of interest rate cuts has been suggested, the timing was not clarified, so investors need to keep a close eye on the Fed's next move. This uncertainty is a factor that increases the volatility of the dollar-yen exchange rate in the short term.
✔️ When the possibility of interest rate cuts increases
If the possibility that the Fed will cut interest rates increases, it is expected that the dollar yen will fall. Interest rate cuts are to lower interest rates in the US and reduce the attractiveness of the dollar. Furthermore, the risk-off movement is progressing, and the trend for investors to buy yen as a safe asset intensifies.
✔️ When interest rate cuts are postponed
On the other hand, if the Fed does not cut interest rates, there is a possibility that the dollar yen will temporarily rise. This is because the postponement of interest rate cuts is interpreted as showing confidence in the US economy. However, in the long run, depending on the progress of inflation and trends in other economic indicators, a sense of direction will be sought again.
✔️ Economic Indicators and Future Points of Interest [Views on Education 💡]
In order to forecast future dollar-yen exchange rates, it is necessary to pay attention to the following points.
1. Fed policy decisions It is important to understand the Fed's policy stance by paying attention to future FOMC meetings and Chairman Powell's remarks.
2. Inflation indicators Since inflation trends have a direct impact on the Fed's policy, it is necessary to pay attention to inflation indicators such as CPI (consumer price index) and PCE (personal consumption expenditure).
3. Economic indicators Economic indicators such as GDP growth rate, employment statistics, and consumer confidence index are also important factors influencing trends in the dollar-yen exchange rate.
✔️ Conclusions
Since Chairman Powell of the Federal Reserve did not specify the timing even though he suggested the possibility of interest rate cuts, uncertainty is spreading in the market. There is a possibility that the dollar-yen exchange rate will fluctuate drastically depending on the Fed's policy trends and the results of economic indicators. Investors are required to carefully analyze these factors and take appropriate positions.
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HONDA N-ONE : I wonder if the expressions “rise” and “fall” for the dollar and yen do something
It can't be helped because it's hard to understand