Yesterday, Cleveland Fed President Beth Hammack delivered the clearest signal for further tightening since the October meeting, a stance that supported the dollar. "I expect policy will need to move to a restrictive stance to bring inflation back to 2% in a timely fashion," Hammack said in Zurich. Recall that on October 12 she spoke only of the need for a restrictive policy to return inflation to target in a reasonable timeframe, stressing that those remarks were not a rate forecast. The new wording is direct: it is now an expectation, and the tone has hardened.

Hammack also proposed a tactical shift. She prefers "more frequent, smaller adjustments where possible," arguing this approach reduces the risk that policy will lag and an inflationary mentality becomes entrenched. For markets, this implies 25-bp moves at multiple meetings rather than rare large jumps. Hammack was one of two Fed voters against leaving rates unchanged on October 28 (she and Lisa Cook dissented); the vote then was 10–2. Back in July, three members dissented—Hammack, Kashkari, and Logan—so Hammack's stance has not softened while her circle of supporters has narrowed.

Hammack's arguments rest on data. Inflation remains above target for nearly six years; pressures are broad-based and come from both demand and supply. Core PCE in September was 3.0%, and total PCE was 3.6%, versus the 2% goal. She also cited signs of labor market strength, consistent with yesterday's report showing initial jobless claims fell to 189,000 versus a 197,000 forecast. Taken together, labor and price data give the Fed little reason to pause.

Richmond Fed President Tom Barkin yesterday also backed a gradual pace of hikes but declined to say how high policy will need to go. Traders now see a December hike and another in March as likely. That shifts the horizon: earlier the market discussed only a December move (probabilities around 67–75%, and about 85% on October 28); now two consecutive hikes are priced in, which would push the funds rate toward roughly 4.25–4.50%.

There is also a political context. Democrats won both chambers of Congress this week, which reduces the risk of direct White House pressure on rates, and Hammack used the moment to stress central bank independence. She argued the Fed has earned credibility as a data-driven institution rather than one swayed by short-term political forces, supporting the dollar's status. She also noted that dollar dominance rests on the rule of law, liquid markets, and central bank independence.

All this leads me to see no case for a December pause: a move to 4.00–4.25% remains the baseline. Continued hawkish Fed rhetoric will support the dollar. Today's jobs report (consensus +65,000) and speeches by Williams, Musalem, and Bowman will determine how confidently the market prices the March hike; if data are not weaker than forecast, I expect renewed pressure on the euro and the pound.

Technical picture for EUR/USD

Buyers should think about taking 1.1210. Only then would a test of 1.1245 be possible. From there a move to 1.1275 is attainable, but achieving that without support from major players will be difficult. On a decline, I expect substantial buying only around 1.1175. If there is nobody there, it would be sensible to wait for a fresh low at 1.1140 or to open longs from 1.1110.

Technical picture for GBP/USD

Pound buyers need to take the nearest resistance at 1.3435. Only then would a move to 1.3460 be possible, above which further progress will be difficult. The furthest target is around 1.3485. On a drop, bears will try to seize control at 1.3405. If they succeed, a range break would inflict serious damage on bulls and push GBP/USD toward 1.3380 with a prospect of extension to 1.3355.