Inflation persists, while Fed members talk about more rate hikes

The dollar extended its gains early in the session on Friday, trading near six-week highs against other major currencies on the back of recent strong US economic data, raising the prospect of further rate hikes by the Federal Reserve. Thursday’s economic data showed that unemployment benefits fell more than expected, while the monthly producer price index, which describes inflation, increased more than expected. The latest economic data supported the US dollar, while the British pound, euro and Japanese yen fell near six-week lows on Friday. At $ , , the index was near 10 . and is on track for a third straight weekly gain. Euro was down about 0.3 % against the US dollar near $1.0635, while the British pound was down about 0.32% at $1.19 9. “Based on recent data, it looks like the US economy is still healthy. It doesn’t look like it will go into recession anytime soon,” said Tina Tengi, market analyst at CMC Markets. “The market appreciates higher prices for longer.” Thursday’s economic data came after better-than-expected retail sales earlier this week, fueling concerns that the Federal Reserve may raise interest rates more than previously expected. Several Fed policymakers have signaled that the central bank still has work to do, saying they should be more than they did in early February after raising 25 basis points. The Fed, according to Cleveland Fed President Loretta Mester, “has made significant progress in moving policy from very accommodative to restrictive, but I think we have more work to do,” said St. Louis Fed President James Bullard. – I supported an increase of 50 basis points and argued that we should reach a level that the committee thought was quite restrictive as soon as possible. And as concerns about continued rates persist, major U.S. stock futures fell in the late Thursday session, with Dow Jones Industrial Average futures down about 6 points, while S&P 500 and Nasdaq 100 futures were down about 0.2%. respectively 0. %. In Thursday’s regular session, after the January producer price index report and Federal Reserve policy comments, the Dow fell 31.20 points, while the S&P 500 fell 1.38% and the Nasdaq Composite fell 1.78 %. “I think the stock market is listening to the consumer data that is contemporaneous — that retail spending is back, consumer confidence is back, and the services PMI is recovering from a slump. There are things to be happy about the labor market. is tight,” says Liz Young, chief investment strategist at SoF . “But I don’t think the stock market is priced in right now, or doesn’t care enough about consumer spending ever. Savings will run out, wage growth will slow and it will not be able to sustain this level of spending in the future. The debt is piling up, Young added. In the oil market, oil benchmarks held steady with weekly losses of more than 2% as recent US economic data fueled concerns about interest rates that could weigh on energy demand as oil inventories rise. Brent crude futures at , lost about 6 cents to trade near $8 .50 a barrel by 033 GMT on Friday, while U.S. West Texas Intermediate (WTI) crude futures fell about 59 cents to settle at $8 .50. “Strong US data fueled concerns about rising interest rates and raised US Treasury yields, weighing on oil and other commodity prices,” said Kazuhiko Saito, chief analyst at Fujitomi Securities Co Ltd.

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