Federal Reserve Board of Governors member Christopher Waller said on Friday that the rapid improvement seen in the labour market and high inflation makes him favour a faster pace of QE taper and sooner rate lift-off, according to Reuters. Inflationary pressures are becoming more widespread, Waller continued and will last longer into 2022 than expected.
Waller added that the labour market is rapidly approaching full employment and that supply chain disruptions were having a larger and more persistent effect on the economy. Nonetheless, Waller said he expects growth in Q4 2021 and Q1 2022 to be "robust". Finally, Waller said that he would support a reduction in the balance sheet, which he thinks might help smooth market functioning, and would support a similar process of balance sheet reduction to last time.
Waller's comments are the most hawkish yet from a core Fed member (i.e. a member of the permanent voting Board of Governors). But for now, FX markets are not seeing any reaction. Fed Vice Chari Richard Clarida is scheduled to speak later in the session. If his remarks follow a similarly hawkish tone, that would be more likely to provoke USD strength.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.