Technical Analysis

Fed’s Daly: We can easily find ourselves overtightening

Adam Button

Adam Button

Friday, 21/10/2022 | 15:48 GMT-0

21/10/2022 | 15:48 GMT-0

  • Wants to avoid an unforced downturn by overtightening
  • Sept SEP summary is a good indication of where things are looking
  • Rental price inflation is starting to slow
  • Need to do everything in our power not to overtighten
  • More tightening is needed
  • Now we are in the stage of policy where we need to be thoughtful
  • Fed getting to 4.50-5.00% next year is reasonable
  • Time is now to start talking about slowing rate hikes
  • We might have another 75 bps but it’s not 75 bps forever
  • Have to take account of synchronized global central bank tightening

Some dovish comments here and EUR/USD at the highs.

The idea earlier was that Timiraos was rolled out because the Fed didn’t like the bond market getting ahead of it and pricing in another hike. These comments absolutely add to it and fed fund futures are now pricing in a 4.90% top from 5.03% yesterday. Daly is a mouthpiece for Powell.

You might remember that she was the first one to float a faster taper in November of last year.

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