Fed’s Bullard: Continued rate increases would “lock in” slowing inflation

The St. Louis Federal Reserve's James Bullard has crossed the wires and stated that the market-based expectations of inflation are "now relatively low" and that the economy is growing faster than previously thought with unemployment below the long-run rate and output above its potential.

He said inflation "remains too high" but note that it has come down recently noting that a "disinflationary" process had begun and could continue with additional Fed rate increases.

"Continued policy rate increases can help lock in a disinflationary trend during 2023, even with ongoing growth and strong labor markets, by keeping inflation expectations low."

US Dollar update

As the above analysis illustrates, the US dollar, as measured against a basket of currencies, has been breaking to the upside and out of a geometrical consolidation's top side resistance albeit on the backside of the prior bullish trends supporting lines.

It has been a slow grind higher for the US Dollar and not even firmly hawkish Federal Reserve rhetoric and data have been able to free up the bulls from the clutches o the bears. However, should the DXY close firmly above 103.65/80 this week, a case for higher could be drawn, as per the following daily chart analysis: