The US Dollar Index, currently just above the 96 mark, hit a 3-month low on Thursday, in the aftermath of the Fed’s previous day announcement. Most notably, the American central bank dropped the word ‘patient’ from their policy language and marked the intention to “act as appropriate, to sustain the expansion”. In central bank talk this means: ‘Get ready, a rate cut is coming’.
Instability arising from trade tensions and inflation below the symmetric target of 2%, were the reasons used to justify this increased dovishness. The North American central bank appears to be totally committed to engineering a soft landing for the US economy, and few will be surprised by a rate cut, that may arrive as early as July.
Photo by Nosiuol.