One comment stood out from Philly Fed President Harker in his latest round of comments. He said he favors shrinking the Fed’s balance sheet late this year or early next.
The hawks have been talking about an aggressive balance sheet rundown but there’s a pushback now, including Powell who indicated he would be patient. Since then, the dollar has been on the backfoot.
Treasury yields are at the lows of the day with US 10s sitting at 1.727% from 1.76% earlier.
With that, the dollar has turned lower once again. USD/CAD is a good illustration as it slips through the Asian lows from earlier and hits the lowest since November 10.
The head-and-shoulders top in this pair continues to unfold.