More from Fed Waller: Now is not the time to use forward guidance.
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More from Fed's Waller: We've gotten persistently better and stronger job reports. AI may be affecting financial conditions. If AI were to pop or pull back, there could be pretty big changes in financial conditions. I see no reason to ever be in a scarce reserves regime. If we ca
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The desk believes the current rhetoric from the Federal Reserve reflects deepening uncertainty about policy decisions, particularly with regard to the resilience of the US labor market and its implications for monetary policy. Per the full note [source], Fed Governor Waller's gloomy commentary suggests that market participants are grappling with the likelihood of a rate cut in December, reflecting concerns about economic performance and consumer affordability. Concurrently, the tension between inflationary pressures, particularly those induced by tariffs, and the Fed's need to support employment results in a complex economic landscape. A focus on these dynamics indicates that traders should remain vigilant as inflation projections rise into early 2024, which could influence currency positioning and volatility.