Fed's Waller: Markets are “way out in front”

Federal Reserve Governor Christopher Waller crossed the wires and said Friday's inflation report was "just one data point," and that markets are "way out in front". This is a theme that is gathering pace in the open as per the following article: 

• US Dollar bulls could start to emerge in the opening sessions

Key quotes

• Will need to see a run of CPI reports to take a foot off the brake.    
• Positive that goods prices came down with some moderation in services, but it needs to continue.
• Fed caught "flatfooted" in 2021 when inflation seemed to moderate then "exploded".    
•  7.7% cpi inflation is "enormous," fed still has a long way to go, rates will stay high for a while. 
• Rates will not fall until there is "clear, strong evidence" inflation is falling.    
• Starting to see a little softening in the labor market, but the "shocking part" is that strength that remains after rate increases.   
• "Critical" that u.s. gets inflation down and "fairly quickly" if possible.    
• So far inflation expectations a couple years out seem to be holding.    
• US policy rate is "not that high" given level of inflation.;    
• Rate hikes so far has not "broken anything    
• The US housing market needed to slow down.    
• US housing markets "will be okay".
• US household balance sheets remain in good shape.   
• Was always going to be a communications challenge to signal slowdown in the pace of hikes, fed "is not softening".    
• Signal was to pay attention to the endpoint not the pace of rate increases, and until inflation slows the endpoint is "a ways out".  
• Fed keeping an eye on the balance sheet, don't want to "crush" holdings in a way that will cause problems in markets    
• A "benchmark" target may be about 8 to 10 percent of GDP.

US Dollar technical analysis

From a 1-hour perspective the bulls will be on the look out for whether there can be a break in the near-term resistance around 106.90.