Fed officials have sent a strong signal over the past week that they will deliver more front-loaded tightening in an attempt to regain control over surging inflation. A larger 50bps rate hike is now the base case for the May FOMC meeting. The sharp adjustment higher in US yields has hit the yen the hardest.
Lee Hardman, Currency Analyst, and Michael Owen, MUFG’s Head of Global Client desk for EMEA in London, discuss the implications for the FX market from the Fed’s shift in policy, and Japanese policymakers reaction to more acute yen weakness.
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