The Federal Reserve (Fed) Governor Christopher Waller said on Thursday that there is no rush to begin cutting interest rates. He further stated that he will need to see further evidence that inflation is cooling before he is willing to support interest rate cuts.
Key quotes
“The start of policy easing and the number of rate cuts will depend on incoming data.”
“The Committee can wait a little longer to ease monetary policy.”
“Puzzled by the narrative that delaying cuts for a meeting or two risks causing a recession.”
“Supposed asymmetry of lagged effects of rate hikes vs. rate cuts is not supported by any model I’m aware of.”
“In the absence of a major economic shock, delaying cuts by a few months should not have a substantial impact on the economy in the near term.”
“Cutting too soon could squander inflation progress and risk considerable harm to the economy.”
“Data received since the last speech on Jan 16 has reinforced the view that we need to verify inflation progress from the last half of 2023 will continue.”
“There is no rush to begin cutting interest rates.”
“The CPI report last week is a reminder that ongoing progress on inflation is not assured.”
“It's not clear yet if the CPI was driven by odd seasonal factors and outsized housing cost increases or signals inflation is stickier than thought and will be harder to bring down to target.”
“Need to see more data to know if January CPI was'more noise than signal’."
“This means waiting longer before having enough confidence that starting rate cuts will keep us on the path for 2% inflation.”
“The strength of output and employment growth means there 'is no great urgency' to ease policy.”
“Still expect to ease policy this year.”
“Recent hotter-than-expected data validates Chair Powell's 'careful risk management approach’."
“The risk of waiting a little longer to ease is lower than the risk of acting too soon.”
“Several indicators suggest some slowing in growth.”
“Latest data on job openings and quits may indicate labor market moderation may have stalled.”
“Based on CPI and PPI, January core PCE may be 2.8% at a 12-month rate, 2.4% at a 3-month rate, and 2.5% at a 6-month rate.”
“It's comforting to know the progress we made was real and not a mirage.”
“Still see wage growth 'somewhat elevated' to achieve a 2% inflation goal.”
“Watching to see if housing costs continue to run higher than expected.”
“Considering all inflation aspects, 'I see predominantly upside risks' to the expectation inflation will keep moving to the 2% goal.”
“Need to see a couple more months of inflation data to be sure if January was a 'fluke' and we are still on track to price stability.”
“There are no indications of an imminent recession.”
Market reaction
The US Dollar Index (DXY) is trading lower on the day at 103.91, as of writing.
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.
Recommended content
Editors’ Picks
EUR/USD turns sideways below 1.0900 ahead of Fedspeak
EUR/USD is trading sideways below 1.0900 in European trading on Monday, despite a risk-on market mood. The pair, however, finds support from the struggling US Dollar and sluggish US Treasury bond yields, awaiting Fedspeak amid light European trading.
Gold price consolidates near $2,450, fresh record highs
Gold price holds its upbeat momentum intact on Monday, sitting at fresh record highs of $2,450 in the European session. The bright metal benefits from renewed hopes for Fed rate cuts and renewed geopolitical tensions surrounding Iran. Fedspeak is next on tap.
GBP/USD holds steady near 1.2700, Fedspeak in focus
GBP/USD is off the highs, consolidating near 1.2700 in the European trading hours on Monday. A subdued US Dollar supports the pair amid moderate risk appetite. Traders stay cautious on potential geopolitical escalation in Iran and ahead of Fedspeak.
Ripple stays above $0.50 on Monday as firm backs research on blockchain and quantum computing
XRP price holds steady above the $0.50 key support level and edges higher on Monday, trading at 0.5130 and rising 0.70% in the day at the time of writing.
Week ahead: Nvidia results and UK CPI falling back to target
What a week for investors. The Dow Jones reached a record high and closed last week above 40,000, for the first time ever. This is a major bullish signal even though gains for global stocks were fairly modest on Friday, and European stocks closed lower.