Fed Monetary Policy Report: Policy well-positioned for what lies ahead
In its Monetary Policy Report to Congress, published on Friday, the Federal Reserve said that inflation is somewhat elevated, while the job market remains in a solid shape, per Reuters.
Key takeaways
“Some early signs tariffs pushing up inflation.”
“Still early to assess tariff impact on economy.”
“Tariff impact yet to show up in official data.”
“Financial stability resilient amid heightened uncertainty.”
“Broad-based decline in Dollar foreign exchange value.”
“Tariffs have weighed on household, business sentiment.”
“Slow start to 2025 tied to tariff related adjustments.”
“In early April, treasury market functioning remained orderly, but liquidity fell to levels last seen in early 2023.”
“Liquidity also materially deteriorated in equity, corporate bond, and municipal bond markets.”
“Liquidity across markets has improved since, but conditions remain responsive to news about trade policy.”
Market reaction
The US Dollar Index edged lower from session highs following this publication and was last seen losing 0.1% on the day at 98.70.
