Still more from Fed’s Waller: If unemployment goes up no reason to panic

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


This article was written by Eamonn Sheridan at Source