The Financial Times reported that Fed Chair Warsh was prepared to raise interest rates as early as September, while observers warned that the foreign-exchange market and market participants’ outlooks could become unsettled as President Trump calls for rate cuts.
The Financial Times reported that Fed Chair Warsh was prepared to raise interest rates as early as September if inflation remained elevated. This could make the Fed’s monetary policy decisions more difficult, it said.
In the New York market on the 6th, selling the yen and buying the dollar gathered pace, with the yen weakening to the mid-¥158 range against the dollar. At the same time, concerns about a renewed rise in inflation have emerged against a backdrop of tensions in the Middle East and higher oil prices, and expectations of a US rate hike are reportedly resurfacing.
Fitch Ratings in Japan said the BOJ was expected to forgo an additional rate hike, warning that coordinated intervention by Japan and the United States alone would make it difficult to sustain a yen appreciation trend over the long term, and that a delay in the BOJ’s policy response could trigger another bout of yen weakness.
With both the Fed’s actions and BOJ policy affecting the foreign-exchange market, some observers say President Trump’s calls for rate cuts and US policy decisions are increasing uncertainty in the market.