This is what the end of the Fed hiking cycle looks like

<p>The US dollar has fallen hard across the board with USD/JPY erasing the entirety of today's earlier move. That comes after a pair of big economic data misses.</p><p>JOLTS job openings plunged to the lowest since March 2021 and the three-month decline of 2.55 million job openings is the largest on record. Meanwhile, US consumer confidence sank to 106.1 from 117.0; it was expected to tick slightly lower to 116.0.</p><p>This could be the start of a relatively quick decline in economic data as pent-up savings from the pandemic run out at the same time that high interest rates sap the consumer. Annecdotes from multiple retailers this earnings season suggest a pronounced slowdown from consumers in June and beyond. Some of that is a shift to services spending but I suspect that will slow in the weeks ahead as consumers are hit by higher gasoline prices. Moreover, Americans are also about to be hit by student debt repayments in October.</p><p>Last week, Powell suggested proceeding cautiously on rates and that will mean no hike in September. The market is only pricing in a 13% chance of a hike anyway. The following meeting isn't until Nov 1 and by then the weight of evidence will make it clear that hikes are no longer needed.</p><p>US 2-year yields may have just stamped a triple top as the next big debate will be when the Fed will start cutting. For now, the market is eyeing May and June 2024.</p>

This article was written by Adam Button at www.forexlive.com.