Fed in a hurry estimates a jump in the first quarter, dollar improves

A look at the day ahead in US and global markets from Mike Dolan

As Wall St. gears up for a bumper first quarter trading day, it looks like the Federal Reserve is in “no rush” to lower interest rates just yet – sending the dollar soaring as other central banks ease rates a bit. Have been.

Fed Governor Christopher Waller signaled on Wednesday before the Easter holiday that the central bank is being patient rather than hesitant in reducing borrowing costs this year.

Although the comments slightly tempered expectations of a rate cut as soon as June – and pushed two-year Treasury yields back up – it was also clear that Waller was only talking about timing. “It’s just a question of when you start,” he said.

Fed Chairman Jerome Powell is likely to reiterate this point on Friday, when he participates in a panel discussion in San Francisco following the release of February’s Fed-friendly PCE inflation gauge. Stock markets will remain closed today due to Good Friday holiday.

But US gross domestic product for the fourth quarter is expected to be confirmed above 3% real growth on Thursday after revisions to the forecast estimate from the Atlanta Fed still show expansion above 2% through Q1, the S&P 500 closed at another record high on Wednesday and futures. It was held before the bell on Thursday.

The dollar gained on the Fed’s hawkish views and the strength of both the US economy and stock market.

The greenback’s index rose to its highest level in nearly six weeks early Thursday, with the dollar advancing against the euro, sterling, Swiss franc, Swedish crown, Chinese yuan and Australian dollar.

Japan’s yen – restrained by further warnings about interference from Japanese authorities – was one of the few that held the line.

Despite pressure from the Fed, expectations of monetary easing are rising around the world. Swiss National Bank…

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