Christopher J. Waller, a voting member of the Fed's Governing Council, delivered some comments on monetary policy and economy this afternoon. Comments can be seen as dovish with Waller hinting that the September meeting may see rates being kept unchanged.
Key takeaways from Waller today
- Data released last week allows Fed to proceed carefully
- Data doesn't say we need to do anything imminent
- Data is looking 'pretty good' for no recession
- Whether more rate hikes are needed depends on data
- Want to be careful on saying inflation job done
- Don't think one more hike would trigger recession
- Not obvious one more rate hike would damage job market
- Need to keep rates up until inflation eases
- Treasury yields are about where they should be
- Fed takes fiscal policy as a given
- Trillion dollar deficits sustained don't look good for the US fiscal position
- We are keeping a close eye on the commercial real estate sector
- I'm not seeing anything in commercial estate that will threaten the economy
Markets saw dovish reactions to Waller's comments, especially to bolded lines. EURUSD bounced off the daily lows and attempted to climb back above 1.0750 mark while European and US index futures revisited daily highs.
EURUSD bounced off the daily lows following dovish comments from Fed Waller. Source: xStation5
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