Fed’s Barkin says persistent inflation warrants policy action
On Tuesday, Richmond Federal Reserve (Fed) President Thomas Barkin appeared at Howard University and said 2 percent inflation isn't a unicorn and that “we can hit it,” adding that Fed policymakers see the impact of AI investment on US inflation.
Barkin commented that it is clear that inflation is “enduring,” and acting “makes sense.”
Key highlights:
2% inflation not some unicorn, something we can hit
We can see impact of AI investment on US inflation
It is clear that inflation is enduring, acting makes sense
It seems clear at this point that shocks are continuing
Doing something about inflation makes sense.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.40% | -0.35% | -0.19% | -0.47% | -0.37% | -0.49% | -0.26% | |
| EUR | 0.40% | 0.04% | 0.16% | -0.07% | 0.00% | -0.09% | 0.14% | |
| GBP | 0.35% | -0.04% | 0.13% | -0.15% | -0.03% | -0.15% | 0.10% | |
| JPY | 0.19% | -0.16% | -0.13% | -0.26% | -0.16% | -0.28% | -0.04% | |
| CAD | 0.47% | 0.07% | 0.15% | 0.26% | 0.10% | -0.02% | 0.22% | |
| AUD | 0.37% | -0.01% | 0.03% | 0.16% | -0.10% | -0.13% | 0.12% | |
| NZD | 0.49% | 0.09% | 0.15% | 0.28% | 0.02% | 0.13% | 0.24% | |
| CHF | 0.26% | -0.14% | -0.10% | 0.04% | -0.22% | -0.12% | -0.24% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
Nothing in this material constitutes investment advice, personal recommendation, investment research, an offer, or a solicitation to buy or sell any financial instrument. The content has been prepared without consideration of your individual investment objectives, financial situation, or needs, and should not be treated as such.
Past performance is not a reliable indicator of future performance and/or results. Forward-looking scenarios or forecasts are not a guarantee of future performance. Actual results may differ materially from those anticipated.
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