In today’s trading, the US dollar is steadily strengthening against the euro, yen and pound sterling on growing expectations of rapid policy tightening by the Federal Reserve (Fed).

More and more Fed chiefs are speaking out in favor of raising the prime rate by 50 basis points (bps) at once as US inflation jumped to its highest since 1981 at 8.5% in March.

Quotes of futures on the level of the base interest rate indicate almost 100% probability of raising the rate by 50 b.p. at the meeting on May 3-4, reports Bloomberg.

Federal Reserve Bank of Cleveland (FRB) Chairwoman Loretta Mester said the day before that the U.S. central bank will taper stimulus measures introduced at the peak of the coronavirus pandemic, but in a way that will ease inflation without hurting economic growth and the labor market.

“We intend to reduce stimulus at the pace needed to improve the supply and demand balance in the economy and bring inflation under control, while continuing to support economic activity and labor market stability,” Mester said.

The European Central Bank (ECB), meanwhile, has not given clear signals on when exactly it intends to start raising rates.

The ECB said yesterday that any adjustment in key interest rates would not come until “some time” after asset purchases under the Asset Purchase Program (APP) are completed. ECB chief Christine Lagarde, responding to questions from reporters, said the ECB is “highly likely” to complete its bond purchases under the APP in the third quarter, but could do so either earlier or later. A decision on the matter, she said, would be made in June. “Some time” between the completion of asset purchases and a rate hike could mean as little as one week or as long as several months, she said.

Bloomberg reported, citing its sources, that ECB leaders agree on the need to raise the deposit interest rate by 25 bps as early as the third quarter of 2022.

As of 9:12 Moscow time, the euro was at $1.0806 compared to $1.0828 at the close of the previous session.

The pound sterling at the same time fell in price to $1.3058 compared to $1.3071 the previous day.

The U.S. currency in a pair with the Japanese national currency by 9:12 Moscow time rose to 126.49 yen against 125.88 yen at the end of previous trading.

Calculated by ICE index, showing the dynamics of the dollar against six currencies (euro, Swiss franc, yen, Canadian dollar, pound sterling and Swedish krona) rose by 0.2%, the broader WSJ Dollar Index also adds 0.2%.