Comments from key Fed officials contributed to this shift. New York Fed President John Williams said policymakers could still adjust rates in the “near term,” while Fed Governor Stephen Miran noted recent payroll data supports December easing, adding he would favor a 25-bp cut if he held a vote.
Boston Fed President Susan Collins remains undecided, maintaining some uncertainty.
Consumer Sentiment Improves Despite Inflation Concerns
The University of Michigan’s November Consumer Sentiment Index edged up to 51, above the preliminary 50.3, though below October’s 53.6 reading. Inflation expectations eased slightly: the one-year outlook dipped to 4.5% from 4.7%, and the five-year measure declined to 3.4% from 3.6%.
The data suggests households are marginally more confident, though still cautious about inflation.
Market Outlook: Dollar Faces Near-Term Pressure
Despite last week’s rally, the dollar faces headwinds as traders weigh rising rate-cut expectations against mixed Fed commentary. With PPI data and additional Fed remarks ahead, investors are adopting a more cautious stance.
Near-term performance will likely hinge on incoming inflation and labor data, alongside clearer signals from policymakers. A confirmed shift toward easing would keep the dollar under pressure into year-end.
