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Fed inflation remarks lift odds of September rate hike

After the Jackson Hole comments, the chance of a September rate hike rose to about 62%, from roughly 33% beforehand.

Reported · Written up by our desk · Major Pairs

Markets were quiet for most of the final week of summer, as U.S. inflation and GDP data came in near expectations and durable goods orders were stronger than expected, with little market impact, Action Forex reports.

The main catalyst was Fed Chairman Warsh’s Jackson Hole speech, where he expressed greater concern about inflation while saying the U.S. economy remains strong and inflation is still too high.

Following the comments, expectations shifted, with the probability of a September rate hike rising to around 62%, from about 33% before the speech, and the U.S. dollar strengthened.

The report says USDJPY moved higher and gold fell sharply at the end of the week, while it flagged the upcoming U.S. employment report as a key driver for the next session.

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