Federal Reserve (Fed) Board of Governors member Christopher Waller noted on Monday that recent US inflation data was a “disappointment,” splitting hairs between the possibility of increasing the pace of cuts. of Fed rates in the future and expressing caution at the current pace.
Key points
I am less certain about destiny than I am about the direction of policy.
My base case foresees a gradual reduction in the monetary policy rate over the next year.
The Fed should proceed with more caution in rate cuts than was necessary at the September meeting.
I see pent-up demand for high-value items, consumers eager to make purchases as rates drop.
Household resources for future consumption are in good condition.
The economy is on solid footing, it may not be slowing down as much as desired; GDP is expected to grow faster in the second half of 2024.
The latest inflation data is disappointing.
If inflation rises unexpectedly, the Fed could pause rate cuts.
If, in a less likely case, inflation falls below 2% or the labor market deteriorates, the Fed can bring forward rate cuts.
If the economy progresses as expected, policy can be moved to a neutral stance at a deliberate pace.
The policy rate is currently restrictive.
Looking ahead, I expect payroll gains to moderate, the unemployment rate to rise but remain historically low.
The labor market is quite healthy, labor supply and demand have balanced.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
