Fed’s Waller: I would say the risks to doing to much and too little are balanced

  • The data last week clearly showed the jobs market is starting to soften
  • Unemployment is about where it was a year ago so change isn’t that big
  • Recessions are often caused by shocks that come out of nowhere but the data so far is pretty good (for a soft landing)
  • I want to be very careful to say that ‘we’ve done the job’
  • I want to see ‘a couple months’ of data
  • I would say the risks to doing to much and too little are balanced
  • I don’t think one more hike would send the economy into a recession
  • Data will drive whether the Fed hikes again
  • Recent data will allow the Fed to proceed carefully
  • We’re starting to see the economy slow down
  • Treasury yields are about where the should be
  • The US economy is ‘about 80% closed’ so impacts from abroad will be smaller than for others
  • We’ve been keeping a very close eye on commercial real estate, will continue to roll over during the next 2 years or so
  • We’re not sure about what prices CRE will be trading at in two years

The ‘carefully’ line to me is now a code word to say that they’re on the sidelines with a hawkish bias.

Waller is a hawk though and if he isn’t pushing for another hike, who is? The US dollar and Treasury yields came down on his comments.

This article was written by Adam Button at www.forexlive.com. Source