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

—

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.