The Dollar Soars Amid Fed’s Warning on More Rate Hikes

The dollar increased during early trade on Thursday in Europe as a senior member of the Federal Reserve warned that the U.S. central bank is still far from ending its cycle of interest rate increases.

Despite falling more than 3% from a 20-year high in the previous week, the dollar index remained stable at 110.97 by 03:05 ET (07:05 GMT). This index estimates the dollar’s value against a basket of currencies from six major nations. The cycle of tightening U.S. policy is “still in its early days,” according to Raphael Bostic, head of the Atlanta Fed. He specifically discouraged laying bets on an early “pivot.”

The End of Recession Nowhere in Sight

Bostic claims that despite recent figures suggesting “glimmers of hope,” the overall image I’m getting is that we are still securely part of the inflationary woods and not out of them.

That warning gained greater significance after the Organization of Petroleum Exporting Countries and its allies—mostly Russia—took measures to maintain high oil prices by announcing a considerable cut in their supply beginning next month. High energy prices have been one of the key causes of the recent worldwide inflation wave. Bostic is not the only member of the Fed who opposes ideas of a change; Mary Daly of San Francisco also expressed the same opinions twice this week, despite a steep fall in job listings that showed some cooling in an already-hot labor market.

Weekly data on U.S. jobless claims is anticipated at 8:00 ET, adding to the body of concrete data on the labor market. However, Friday’s official labor market report will set the market’s course for the next week.