Michael Woolfolk Fed Quotations

Given recent Fed warnings over high levels of capacity utilization and low levels of unemployment, today's report increases the probability that the Fed will raise rates above 5.0% later this year. Last Friday's release of March unemployment further buttresses this view.

Our Fed watchers say there's a consistent story that the Fed is one and done. Today's data doesn't change this story.

We won't see the dollar embarking on any new trend until the markets get a better sense of where the Fed is headed.

Were this trend in new home sales to continue, the Fed will be less likely to increase interest rates, which would be a dollar negative.

The monthly GDP report fed into underlying CAD strength. With political risk subsiding, rising interest rates and fundamental economic strength are prompting CAD buying, which is expected to continue through year-end as USD/CAD heads for the 1.10 mark.

February's data support the view that the U.S. labor market remains strong, particularly on the services side, with unemployment solidly below the 5% level. The Fed is likely to continue raising rates for the foreseeable future.

If unemployment dips any lower, that may indicate some wage inflation and the Fed will likely continue to raise rates.

Interest rate differentials are supporting the U.S. dollar for the time being. Until the Fed pauses, it looks that's going to provide support for dollar bulls.

The door will be left open for future rate hikes but the Fed will be increasingly data-dependent. That's positive for the U.S. dollar.

The removal of the word 'measured' ... would be positive for the dollar as it suggests that the Fed is giving itself room to raise rates at a faster pace later this year.