Fed governor Christopher Waller pushes back against the idea of a premature Fed policy pivot due to market instability
"Let me be clear that this is not something Iām considering or believe to be a very likely development." federalreserve.gov
"Let me be clear that this is not something Iām considering or believe to be a very likely development." federalreserve.gov
Other highlights from Waller's speech:
-Monetary policy is slightly restrictive, and the effects are showing up in the economy. "But more needs to be done to bring inflation down meaningfully and persistently."
-Core inflation is not only high, but it is persistent.
-Monetary policy is slightly restrictive, and the effects are showing up in the economy. "But more needs to be done to bring inflation down meaningfully and persistently."
-Core inflation is not only high, but it is persistent.
Waller: The Fed hasn't made enough progress on inflation to justify a lower terminal rate than the 4.6% one in the latest Summary of Economic Projections
-Housing could face a "fairly mild" correction but there is risk of a "material correction" in home prices.
-Housing could face a "fairly mild" correction but there is risk of a "material correction" in home prices.
Waller explains how shelter inflation is lagged and so recent "glimmers" of moderation in rents won't show up for a while.
-A step-down in non-housing core inflation is "quite possible" given considerable rate increases and additional anticipated increases.
-A step-down in non-housing core inflation is "quite possible" given considerable rate increases and additional anticipated increases.
Waller on the November FOMC:
The last SEP shows most officials expect rate increases of either 75+50 or 50+50 at the Fed's last two meetings in Nov and Dec.
There's not a lot of data to change officials' views by Nov. 1-2.
The last SEP shows most officials expect rate increases of either 75+50 or 50+50 at the Fed's last two meetings in Nov and Dec.
There's not a lot of data to change officials' views by Nov. 1-2.
Waller: "I imagine we will have a very thoughtful discussion about the pace of tightening at our next meeting."
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