More again from Waller’s Q&A (which is now complete)
- Waller notes he looks through the loosening in financial conditions indexes because it’s mostly the stock market – specifically the Magnificent 7.
- Also notes tight credit spreads could just be the rise in private credit lending. He thinks conditions are tight because real rates remain high.
- Inflation adjusted interest rates seem to have gone back up since
christmas; lot of factors go into rate spreads - Want to see up to
five months of good inflation data, so far have only two months;
question is how much data do you need - Fed is reacting to
the data and not ‘overreacting;’ have two more inflation rates before
may fomc meeting - ‘no evidence’
quantitative tightening has been a reason rates have gone up;
balance sheet has more effect during stress - Unemployment rate
doesn’t have to stay at 3.7% to have a soft landing; if unemployment
goes up no reason to panic
—
Earlier:
- Fed’s Waller says may need to hold current rate for longer than expected, no rush to cut
- Waller’s remarks have pumped up the US dollar
- (ps still is too)
- More Fed’s Waller: The economy has supported the cautious approach by the Federal Reserve
This article was written by Eamonn Sheridan at www.forexlive.com. Source