Feds Waller: Finally seeing some signs of disinflation in recent data.
Open to leaving rates unchanged at the September meeting if inflation cools.
Finally seeing some signs of disinflation in recent data.
Communicating his reaction function helps the public plan.
Would consider a September rate hike if August inflation data comes in hot.
Inclined to support holding rates steady at the September 15–16 meeting if August inflation data shows continued progress.
It may not take much acceleration in inflation to support tighter policy.
If August inflation data shows progress has reversed, a “small adjustment” to the policy rate would help ensure progress resumes.
GDP is growing at a solid pace, while equity price gains should sustain consumption growth.
Considerable uncertainty surrounds the outlook for prices and the economy because of military conflicts, trade policy and AI.
Inflation remains significantly above the Fed’s 2% target.
AI investment is a legitimate part of GDP, and AI will reliably raise productivity.
Elevated energy prices and tariffs are not significant sources of ongoing inflation pressure.
Underlying inflation is doing better than the core numbers suggest.
The labor market is in satisfactory shape; expects more of the same in the August jobs report.
Sees some upside inflation risk, though wage growth is consistent with inflation returning to 2%.
Core PCE is not the best guide to where inflation stands.
Sees considerable improvement, with an encouraging pace of progress in three-month core inflation.
Pending revisions to the Commerce Department’s non-market price estimate could lower 12-month PCE inflation by a few tenths of a percentage point.
Says that we should start seeing some lower numbers on inflation. He expects a reasonable CPI
When you are near a turning point you have to put more weight on near-term data.
The US yields are pushing to the downside with the 10 year down -3.20 basis points at 4.756%.
The 2 year yield is down 5.4 basis points at 4.331%.