Feds Waller: Finally seeing some signs of disinflation in recent data. How are the markets reacting?
From the original
Fed's Waller is speaking and although he is keeping the door open for a tightening is also encouraged by signs of disinflation. Waller says: Open to leaving rates unchanged at the September meeting if inflation cools. Finally seeing some signs of disinflation in recent data. Comm
Related speeches
4 itemsUBS On-Air: Paul Donovan Daily Audio 'Rate cut speculation'
The current discourse surrounding a potential December rate cut, as advocated by Federal Reserve Governor Waller, indicates an underlying concern for US labor market stability and overall economic health. Per the full note from UBS, Waller's remarks highlight the delicate balance the Federal Reserve must maintain between stimulating growth through monetary policy and addressing rising inflationary pressures and employment fears. The market's reaction suggests a nuanced sentiment, where interpretations may vary based on confidence in the economic recovery trajectory versus inflationary dynamics. As economic indicators are released today, including retail sales and producer price inflation, these will provide critical context for gauging market expectations and Fed policy shifts moving forward.
Rates Spark: A short sigh of relief
The desk interprets recent dovish comments from Fed official Waller as a temporary reprieve in the bearish trend for U.S. rates, which remains highly sensitive to incoming data. Per the full note from ing-think, this reaction signals a potential pause in rate hikes depending on upcoming jobs and inflation reports. A payroll number below 25,000, in conjunction with tame CPI readings, could solidify this pause narrative and reshape trader expectations. The positioning around this data is crucial, as the market implied probability for a rate hike remains fluctuating just below the 50% mark.
More like this
5 itemsCleveland Fed President Beth Hammack is sounding decidedly hawkish on monetary policy
RBNZ signals December, not October, for its next rate hike
PBOC sets USD/ CNY reference rate for today at 6.7787 (vs. estimate at 6.7093)
PBOC is expected to set the USD/CNY reference rate at 6.7098 – Reuters estimate