The Fed will be unable to control inflation? | 14 June 2022

14 June 2022, USD/JPY

The Fed will be unable to control inflation?

USDJPY trading plan:

A closely watched part of the U.S. Treasury yield curve inverted for the first time since April following hotter-than-anticipated inflation data last week. As the U.S. Federal Reserve attempts to bring inflation down from 40-year highs, banks have ramped up projections of interest rate hikes, and some shorter-dated bond yields surged higher than longer term ones. A flattening curve can mean investors expect near-term rate hikes and are pessimistic about economic growth. Short-term yields, which are sensitive to interest rates, are rising with rate-hike expectations while higher long-term rates reflect concerns that the Fed will be unable to control inflation. The inversion signals that a recession could follow.

Investment idea: buy 133.85 and take profit 134.55.

David Johnson
Analyst of «FreshForex» company
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