Currency markets were largely steady ahead of Federal Reserve Chair Kevin Warsh’s first Jackson Hole address, with investors looking for a clearer read on inflation and the path of interest rates.
The U.S. dollar traded near a one-week high early Friday as investors paused ahead of Federal Reserve Chair Kevin Warsh’s keynote address at the Jackson Hole Economic Policy Symposium in Wyoming.
The dollar index was little changed at 99.13, after rising about 0.3% for the week, according to Reuters. The euro and British pound hovered near one-week lows against the dollar, while the Japanese yen was broadly steady at 159.34 per dollar.
Warsh’s speech was set to be his first at Jackson Hole since taking over as Fed chair in May. Markets were watching for an explanation of how he sees persistent inflation, elevated Treasury yields and the circumstances that could warrant further rate increases.
Several Fed officials had already struck a cautious tone as the conference opened. Kansas City Fed President Jeffrey Schmid said inflation remained stubborn, while Cleveland Fed President Beth Hammack said policymakers should be prepared to act. Boston Fed President Susan Collins described the latest inflation data as mixed and said a rate increase remained an open question.
Reuters reported that traders were assigning roughly a 35% probability to a rate increase at the Fed’s September meeting and about a 75% chance of one by December. The Fed’s policy rate has remained in a 3.50% to 3.75% range since December, while the personal consumption expenditures price index was 3.7% higher in July than a year earlier, above the central bank’s 2% target.
