Fed Austen Goolsbee commented US economy. The US 2-year/10-year Treasury yield curve turns positive today, for the first time since July 2022.
- The Fed will respond to conditions. If the economy deteriorates, the Fed will fix it.
- The stock market has a lot more volatility than the Fed. It seems like there is a lot going on in the world, which makes things a little more complicated.
- On the other side, the GDP number was a bit stronger than expected. Economic growth continues at a steady level.
- That said, there are cautionary indicators in other data, such as business defaults.
- We expected some weakness in manufacturing due to pandemic effects.
- We must be a little careful overconcluding about the jobs report. The manufacturing sector is a little complicated.
- The Fed does need to be forward-looking in making decisions.
- The jobs numbers were weaker than expected but is not looking yet like a recession.
- You only want to be that restrictive if there is fear of overheating. The data does not look like the economy is overheating.
- If the stock market moves gives the Fed indication over a longer-arc that we are looking at deceleration in growth, we should react to that.
- If jobs data is a longer-term sign, we should then respond to what those forces are.
- The Fed's job is not to react to one month's numbers on jobs.
- We can't blow through normal on jobs. If we do, we'll have to react more robustly.
- The Fed can wait for more data before the September meeting.
- We should respond to conditions on the broad through line; inflation is way down and employment is at a relatively decent spot.
- If we are not overheating, we should not tighten our restrictiveness in real terms.
- You only want to be there for as long as you have to. We are restrictive in real terms at the highest in many decades.
- There is some weakness in the jobs market, we have to pay attention to that. I have been saying for some time we are in a balanced risk posture.
EURUSD (D1 interval)
Eurodollar gains more than 0.6% today and the pair is one step closer to the significant, psychologically resistance zone at 1.10.
Source: xStation5
