US Dollar: A Demonstrable Move to a More Supportive Fed is Required for a Tactical Selloff, According to Goldman Sachs

Prior to this week's FOMC policy meeting, Goldman Sachs economists provide their forecast on the US dollar.

July 26, 2022 - 12:03 PM 279 views

US Dollar: A Demonstrable Move to a More Supportive Fed is Required for a Tactical Selloff, According to Goldman Sachs

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© US Dollar: A Demonstrable Move to a More Supportive Fed is Required for a Tactical Selloff, According to Goldman Sachs

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Prior to this week's FOMC policy meeting, Goldman Sachs economists provide their forecast on the US dollar.

Key Quotes

"More reassuring inflation news and more impartial Fed policies are likely necessary for a convincing flip in the dollar. Although some of the most recent inflation-related news has been positive, we believe that Fed officials will need to acknowledge this this week in order to prevent a tactical Dollar selloff.

“As said in the June meeting, "Markets will once again focus on the rising increment at this meeting and guidance for September, but it will be more crucial to focus on the Fed's criteria for changing its approach."

"At the conference this week, we'll mostly be concerned with whether authorities widen that standard to place more emphasis on data showing slowing activity. It will be challenging for the market to price a more flexible Fed and a weaker Dollar until that move is more apparent.”

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