Jul 18, 2018 8:44 AM | Daily Market News
LGT Navigator: Fed on course, despite trade war risks
US Federal Reserve Chairman Jerome Powell's statements in his semiannual monetary policy report to the US Senate's Banking Committee pointed to an unchanged Fed course of further gradual interest rate hikes. Despite the risks of the trade conflict, Powell continues to see the US economy on the upswing. With the right monetary policy, the labor market will remain strong in the coming years and inflation will remain close to two percent, Powell said.
The ECB's cautious bias toward an interest rate turnaround, despite the announcement to end its billion-dollar bond purchase program probably at the end of this year, weakened the euro significantly. The ECB maintained its key interest rate at a record low and remained extremely cautious in its communication. At the same time, the Bank of Japan also left its key interest rates unchanged and even lowered its inflation expectations.