Aussie dollar trades below 69 US cents

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In the United States on Friday US Federal Reserve Chair Jerome Powell Jackson Hole's speech was brief but on point. The speech was almost entirely devoted to the Federal Reserve’s commitment to getting inflation back to the 2% target. The message landed with a thud on Wall Street, sending the Dow Jones Industrial Average down more than 1000 points for the day. The Dow Jones average finished down 3 per cent on Friday, its worst day in three months. The tech-heavy Nasdaq composite shed nearly 4 per cent. Some on Wall Street expect the economy to fall into recession later this year or early next year, after which they expect the Fed to reverse itself and reduce rates. The key message was that the Federal Reserve intends to keep the cash rate at restrictive levels “for some time ” because history shows that loosening monetary policy too soon can allow high inflation to become entrenched. Powell didn’t give much away about the rate decision in September, saying it will depend on inflation and jobs data received by that meeting. On Friday, an inflation gauge that is closely monitored by the Fed showed that prices actually declined 0.1 per cent from June to July. Though prices did jump 6.3 per cent in July from 12 months earlier, that was down from a 6.8 per cent year-over-year jump in June, which had been the highest since 1982. The drop largely reflected lower gas prices.