Fed’s Cook is on the wires saying:
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I believe that a soft landing is possible
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Risks are two-sided, must balance risk of not tightening policy enough against risk of doing too much
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There’s a risk that continued demand momentum could slow pace of disinflation
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Small business conditions, housing sector. Lower-income households may be signaling loader stress ahead
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Also attentive to risk of renewed global economic shocks, including geopolitical and muted growth in China, Europe
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Fed policies have spillovers abroad
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Concurrent global central bank tightening may mean each central bank need do a bit
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Supply chain improvements, drop in commodity prices has also helped inflation’s fall
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Increased multifamily housing supply will contribute to the expected further reduction in inflation
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Labor supply, demand coming into better balance
Lisa Cook is a Governor on the Federal Open Market Committee and as such as a permanent vote for policy..
The last tightening has been priced out of the market for 2023 after the CPI. The focus is now on rate cut probabilities. March has a 35% probability of a cut, while May is up to 68%.
This article was written by Greg Michalowski at www.forexlive.com. Source