Fed Chair Powell Highlights Labor Market Risks, Dollar Declines

According to ChainCatcher, Federal Reserve Chair Jerome Powell emphasized risks in the labor market while downplaying inflation concerns during his speech on Wednesday. This led to the U.S. dollar experiencing its worst performance in nearly three months. The dollar index closed down 0.4%, marking its largest drop since September 16, following the Federal Reserve's decision to cut interest rates by 0.25 percentage points. Alex Cohen, a strategist at Bank of America, noted that Powell's less optimistic view on the labor market contributed to the dollar's decline. Macro strategist Edward Harrison suggested that the weak dollar should be guided by bond and interest rate differentials.