US Dollar: Fed outlook stays data-dependent after Waller – Danske Bank
Danske Research Team highlights that Fed Governor Waller is inclined to keep rates unchanged in September if August inflation shows further progress, but would consider a hike if inflation comes in hot.
Federal Reserve Governor Waller signaled a willingness to maintain the federal funds rate unchanged in September should August's inflation data indicate further improvement, though he would consider a rate hike if inflation proves more robust. This stance, which pushed the odds of a September rate increase closer to a 50/50 proposition, slightly weakened the US Dollar.
The remarks highlighted the Fed's heavy reliance on forthcoming economic data to inform policy decisions. The US services sector showed solid momentum in August, with the ISM services index rising to 55.4, exceeding expectations. Meanwhile, the upcoming US jobs report, the week's most crucial economic data point, is anticipated to reveal nonfarm payrolls at around 65,000, a slight uptick from forecasts, with the unemployment rate remaining at 4.1% and average hourly earnings growing by 0.3% month-over-month.
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