Boston Federal Reserve President Susan Collins addressed the market following its close, highlighting a more cautious stance within the Federal Open Market Committee (FOMC). Collins, who supported last month’s quarter-point interest rate reduction, indicated that there is a “relatively high bar” for any further easing in the near future. She cited ongoing inflation pressures, the impact of tariffs on prices, and the limited economic data available during the recent government shutdown as key considerations.
Her remarks suggest a notable shift among Fed officials, with four voting members—Collins, Musalem, Goolsbee, and Schmid—now indicating they are not seeking another rate reduction in December. This may signal a period of stability for monetary policy as officials weigh economic conditions closely.
In Japan, the economy displayed signs of resilience as wholesale prices increased by 2.7% in October, surpassing market expectations. Bank of Japan Governor Kazuo Ueda reported to parliament that underlying inflation is “gradually accelerating” towards the 2% target, signaling potential readiness for interest rate hikes. Ueda also noted that the Bank of Japan is prepared to respond flexibly to significant changes in long-term yields, including the possibility of further bond buying if necessary.
Meanwhile, the Australian dollar experienced a rally, although local stocks reached a three-month low in the wake of a robust labor market report. The unemployment rate fell from a four-year high, with job creation significantly outpacing forecasts and a notable rise in full-time employment. This data diminishes the likelihood of a rate cut by the Reserve Bank of Australia in December and suggests that easing may be pushed out well into 2026.
Adding to the economic backdrop, the recent U.S. government shutdown has concluded, with Congress passing legislation to resume federal operations after 43 days—the longest shutdown in U.S. history. Following this reopening, the White House announced the delayed September Bureau of Labor Statistics data will now be published.
Market activity remained subdued, with major currency pairs trading within narrow ranges. The USD/JPY pair briefly approached the 155.00 mark before retracting, while the EUR/JPY reached a record high near 179.50. Gold prices appreciated slightly, and oil prices saw modest recoveries.
Overall, the current economic landscape suggests a cautious yet potentially stabilizing period in monetary policy across multiple countries, reflecting ongoing adjustments to inflationary pressures and labor market dynamics.