Fed's Powell: Biggest concern is tension between inflation and maximum employment

The panel from which Federal Reserve Jerome Powell has been participating today has officially ended with his final comments highlighting that his biggest concern is tension between inflation and maximum employment.

Additionally, he said that managing through that process over the next couple of years is going to be very challenging. 

Market implications

Markets are pricing in prospects of the Fed to start withdrawing policy support just as the global growth is expected to slow in the last quarter of 2021. This makes for a challenging situation, which Powell has expressed again today.

That being said, the dollar surged again on Wednesday to a fresh 10-1/2-month peak against rival currencies, boosted by increased expectations for a reduction in the US Federal Reserve's asset purchases by the end of the year and an interest rate hike, possibly as soon as late 2022.

This has seen EUR/USD on the verge of a critical break below 1.1600:

• EUR/USD Price Analysis: Bears look into the abyss, 1.1600 eyed