Federal Reserve Governor Brainard strikes more hawkish tone
Another top US rate-setter appeared to shift towards a more hawkish stance overnight, saying the economy was at an inflection point and monetary policy was approaching another, in reference to the size of the central bank's balance sheet and the then current policy of reinvesting the proceeds from its holdings of financial assets.
"Assuming continued progress, it will likely be appropriate soon to remove additional accommodation, continuing on a gradual path," Fed governor Lael Brainard said in a speech late during the previous session.
Speaking at Harvard University, Brainard emphasised the economy appeared to be at an inflection point, now that unemployment and inflation were close to the central bank's targets, foreign economies were on a more sound footing and risks apppeared to be as closed to balance as they had been for a while.
Coming from someone which had long been held to be on the more 'dovish' side of the policy spectrum, her remarks may have contributed to pushing up the implied probability of a 15 March 25 basis point rate hike overnight.
According to the CME's Fed Watch tool, the odds of one stood at 77.5% as of 1330 GMT, up from 66.4% on the day before.