Fed Bostic sees risk of recession

Raphael Bostic, head of Atlanta Fed, delivered a speech today. He pointed out that there is still a lot to do on inflation and the economy will have negative impact on price growth (as he expects a slowdown). Bostic sees risk of a recession although it will rather be a short and shallow one.

Bostic stresses that rate cuts this year are not a base case scenario for him and that Fed will not cut rates until well into 2024. However, one should remember that the FOMC dot-plot assumes rate cuts next year. Simultaneously, Fed should maintain an outlook on possible continuation of rate hikes. Overall, Bostic wants to see what impact previous rate hikes will have on the economy.

EURUSD is trading slightly higher on the day after two final days of the previous week were marked with significant strengthening of USD. EURUSD is currently trading below 2 important resistance levels - 1.09 area and 50% retracement of the last major upward impulse.

Source: xStation5