Warsh pledges to slow inflation to 2%, saying Fed may have ‘work to do’
The comments by Warsh prompted futures traders to increase the odds that policymakers next month will push up the main interest rate.
The Mexican Peso experienced a decline against the US Dollar on Friday, falling by more than 0.42% following hawkish comments from Federal Reserve Chair Kevin Warsh at the Jackson Hole Symposium. This led investors to anticipate a potential interest rate hike in 2026, which supported the US Dollar. The USD/MXN exchange rate stood at 17.04, after rebounding from daily lows of 16.94.
Warsh's speech set the market tone, with uncertainty over his future guidance. While he indicated the Fed would become more "quiet," inflation remained his top priority, given that underlying inflation indicators have not improved. The Fed aims for a 2% Personal Consumption Expenditure (PCE) goal, and if prices do not subside, the Fed plans to take action.
Following Warsh's remarks, the USD/MXN regained the 17.00 level, boosted by overall US Dollar strength. The US Dollar Index (DXY), which tracks the dollar's value against a basket of currencies, rose by over 0.52% to 99.64, near a seven-day high, as investors grew confident in the Fed's rate hike plans. However, the technical analysis suggests the near-term tone for USD/MXN remains bearish, with price action capped by overhead resistance.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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