We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
Oil - US Crude
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Another failure Boris!
  • RT @vtchakarova: British PM Johnson says won't negotiate further Brexit delay with EU. The EU also made it very clear (see Juncker’s recent…
  • How will the Trump impeachment process affect #forex and US stocks? Find out from Rupert Osborne, @IG_US, only on Trading Global Markets #podcast. Missed the episode? Read up here: https://t.co/1Bgo0Fl5CV https://t.co/BRNvqHVjYY
  • RT @bbclaurak: I'm told that's the advice from Cabinet Secretary - legal default is still leaving at end of this month, because they can't…
  • RT @bbclaurak: No 10 claims chances of no deal go up if Letwin passes - 'the govt will step up no deal preparations immediately as the risk…
  • RT @NSoames: I shall vote against The Letwin amendment and for the Deal
  • RT @Robert___Harris: On the eve of tomorrow’s rushed Commons vote I keep thinking of the journalist Phillip Knightley’s memo to the executi…
  • The $AUD has wilted as markets price in further rate cuts even as the OCR hovers at just 1%. Those cuts may come, but labor market strength may have to wane first. Get your market update from @DavidCottleFX here: https://t.co/h1Uvm8ogXh https://t.co/M1IP0jqh41
  • The inside bar pattern occurs regularly within the financial markets. Incorporating the inside bar strategy within a trading system can enhance a trader’s market analysis technique. Find out how you can use it from @WVenketas here: https://t.co/E3EWOYTYNw https://t.co/ZCT4pwc6nv
  • Greed has proven to be a hindrance more than assistance for traders. How does greed impact your trading? Find out from @RichardSnowFX here: https://t.co/aT8TZjlFqP https://t.co/C4vrTm69sE
Fed and Interest Rates Discussion with Tim Duy | Podcast

Fed and Interest Rates Discussion with Tim Duy | Podcast

2019-04-18 11:04:00
Ben Lobel, Markets Writer

Key points covered in this podcast

- Temporary hiring is a useful indicator for traders to consider

- Take bearish monetary policy commentary with a grain of salt

- Be wary of the Fed’s ‘phantom inflation menace’

Tim Duy is a professor at Oregon University, expert in the US macroeconomy and author of Tim Duy’s Fed Watch, a blog keeping market practitioners up to speed with key Federal Reserve news.

In this edition of our podcast Trading Global Markets Decoded, our host Tyler Yell talks to Tim about the Fed and interest rate decisions, whether central banks are falling prey to ‘Japanification’ and what to make of bearish monetary policy commentary. Benefit from the Fed Tips with Tim Duy and listen to the podcast by clicking on the link.

Follow our podcasts on a platform that suits you

iTunes: https://itunes.apple.com/us/podcast/trading-global-markets-decoded/id1440995971

Stitcher: https://www.stitcher.com/podcast/trading-global-markets-decoded-with-dailyfx

Soundcloud: https://soundcloud.com/user-943631370

Google Play: https://play.google.com/music/listen?u=0#/ps/Iuoq7v7xqjefyqthmypwp3x5aoi

Federal Reserve expert Tim started blogging about Fed monetary policy in 2005 and caught the attention of Bloomberg and other market specialists. Now, he’s a respected commentator in the field, analyzing the likes of key employment reports, interest rate hikes and inflation targets.

Tim recommends temporary hiring as a leading indicator for traders to watch. ‘Firms are more likely to lay off their temporary help workers first before moving to permanent workers,’ he explains. ‘And on the other side, because firms are never really sure if the rebound is for real or not, they tend to hire those temporary workers first.’

The measure being weaker in the last few months is consistent with stories we’ve heard on slowing economic activities, particularly in the manufacturing sector, Duy adds. ‘A lot of these jobs are tied to the manufacturing sector and become more cyclically attached to that sector, so I think we’re seeing a pattern of softer temp help numbers than we’ve seen in other slowdowns such as in 2015 or 2016.’

Bearish Monetary Policy Commentary

He also notes that a lot of the bearish commentary on monetary policy can often be taken with a grain of salt. ‘You have to have something in your analysis that recognizes that downturns have tended to be fairly shortlived and upturns really drive most of the market activity,’ he says.

Tim reinforces that the Fed exists in part to prevent the economy falling into a hole. ‘People forget there’s a major entity out there that is tasked with preventing the economy from falling into the recession that so many people fear.’

Tim Duy's Fed Watch

You have to be willing to move ahead of any real downturn in the economy, he adds. ‘The yield curve is a long leading indicator, which means it could be over a year, or two years before you saw a recession.

‘So by definition the economy’s still doing well, you’re ahead, you’re still far from the peak of the business cycle, and the data in general will be good, so it’s hard for the Fed to reverse direction on the rate hikes very easily given the economic outlook and data is fairly solid.’

How high will inflation get?

Tim believes the Fed has been fighting what he calls a ‘phantom inflation menace’, pointing out we have never seen inflation rise enough in this cycle or the last 20 years to have a ‘1970’s worry’ of the direction of inflation.

‘We often forget that we look at these inflation forecasts and we have arguments over how high inflation is going to get; we’re looking at 25 basis points within a 2.0% target,’ he says.

‘Sometimes I worry the Fed doesn’t recognise that they have plenty of space. This isn’t 1968 where inflation kicked up a lot and they got lost in the process. Here, the probability of having these sharp jumps in inflation that the Fed has to react to is fairly small.’

The real concern, he says, is when policymakers become very worried about inflation they tend to hold interest rates higher than they should for longer than necessary.

‘That’s where I think your primary risk of a policy area is going forward. Right now we’re fortunate the Fed did back off rate hikes fairly aggressively in the first three months of this year.’

Be Sure to Check Out Tim’s Platform

You can stay up to speed with Fed news on Tim Duy’s Fed Watch, and also follow Tim on Twitter through the handle @timduy.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.


News & Analysis at your fingertips.