US dollar perks up after Bullard’s latest comments | Forexlive

There have been plenty of reasons for US dollar strength this week, including today’s PPI data, but the comments from Bullard aren’t one of them.

He said he advocated for 50 bps at the most-recent FOMC meeting but that’s not really news. He openly talked about getting to a restrictive stance faster in the lead-up to the meeting. Moreover, he said that he sees 5.25-5.50% as appropriate, which indicates he hasn’t decided to move up his dot.

If anything, the market should be breathing a sigh of relief that Bullard didn’t come out guns-a-blazin’ today and calling for 6% Fed funds. It’s clear to me that the playbook from the Fed now is to advocate getting to 5.00-5.25% or 5.25.5.50% and staying for longer; Bullard is no different.

In any case, the dollar, bonds and equities have all moved on the headlines.