The supply chain pressures are waning | 18 10月 2022

18 10月 2022, GBP/USD

GBPUSD trading plan:

The supply chain pressures that were so instrumental to driving up U.S. inflationary pressures at the onset of the coronavirus pandemic are waning. The New York Fed supply chain pressure index was last at essentially "normal" levels in January 2020 before the pandemic hit, and surged to a reading of 4.3 in December 2021, before starting a retreat that left the index at 1.05 as of last month. The Fed hopes that by increasing the cost of short-term borrowing it will bring into better alignment demand with existing levels of supply. Fed officials have noted repeatedly that monetary policy can't do anything about supply, but it can bring demand down when supply is falling short, which should in theory lower price pressures back toward the Fed's 2% target.

Investment idea: buy 1.1322 and take profit 1.1400.

David Johnson
Analyst of «FreshForex» company
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