Dollar poised for weekly gain as rate cut hopes fade
dollar advanced on Friday and was poised for a weekly gain, as recent economic data and comments from Federal Reserve officials have cooled expectations of rapid cuts in interest rates.
Economic data showed the University of Michigan's preliminary reading on the overall index of consumer sentiment came in at 78.8 this month, the highest reading since July 2021, compared with 69.7 in December and the 70.0 estimate of economists polled by Reuters.
«The doom and gloom crew is very vocal, especially among politicians,» said Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin.
«Yet, businesses and individuals have been quietly plugging away, trying to make the best of their situations.
That's beginning to change a bit as sentiment has begun to catch up with what people are actually doing.»
The data comes on the heels of solid labor market and retail sales data earlier this week indicating the economy remained firm.
A steady stream of Fed officials, starting with Governor Christopher Waller on Tuesday, have pushed back on market expectations the central bank will embark on a path of fast reductions to interest rates.
Waller said the Fed should proceed «methodically and carefully» until it is clear lower inflation will be sustained.
On Friday, Chicago Fed President Austan Goolsbee said weeks more of inflation data need to be in hand before any decision could be made to cut interest rates.
