Fed’s Waller. Fed should proceed with more caution on rate cuts than was needed at Sept

FOMCs Christopher Waller is speaking and says:

• Fed should proceed with more caution on rate cuts than was needed at September meeting

• My baseline calls for reducing policy rate gradually over the next year

• Policy rate is currently restrictive.

• If economy proceeds as expected, can move policy to a neutral stance at a deliberate pace.

• If, in a less likely case, inflation falls below 2% or labor market deteriorates, the Fed can front-load rate cuts.

• If inflation unexpectedly rises, the Fed could pause rate cuts.

• Latest inflation data is disappointing.

• Economy is on solid footing, may not be slowing as much as desired; expect GDP to grow faster in 2H 2024.

• Household resources for future consumption are in good shape.

• Consumers are eager to make big-ticket purchases as rates come down, with pent-up demand.

• Labor market is quite healthy, labor supply and demand have come into balance.

• Hurricanes, Boeing strike may reduce October payrolls growth by 100,000.

• Looking ahead, expect payroll gains to moderate, unemployment rate to drift higher but stay historically low.

• Watching inflation data to see how persistent recent uptick is; progress on inflation has been a rollercoaster.

This article was written by Greg Michalowski at www.forexlive.com.