Major Wall Street indices gave back early gains as hawkish comments from FED's Loretta Mester weighed on market sentiment. Currently Dow Jones is trading 0.905 lower, while S&P500 and Nasdaq fell 0.60% and 0.40% respectively.
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Mestar noticed growing evidence that high inflation is finally easing, which shows that the Fed's sharp interest rate hikes are working as intended, however added that additional rate increases are still required.
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In her opinion policy rates should rise a little bit above the 5% to 5.25% range projected by policymakers for the end of 2023.
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“We’re not at 5% yet, we’re not above 5%, which I think is going to be needed given where my projections are for the economy,” she said. “I just think we need to keep going, and we’ll discuss at the meeting how much to do” she said.
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Mester would like to see inflation moving down faster before she could support a pause within the next few months.
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"I do believe we have to continue raising ... and then hold for a while so that we get back to price stability in a timely way.”
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She declined to comment on the size of the rate hike she favors at the Fed's next meeting.
US30 retreated to major support at 33720 pts, which coincides with 61.85 Fibonacci retracement of the last downward correction, 50 SMA ( green line). Should break lower occur, downward move may deepen towards next support at 32620 pts. Source: xStation5
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