Technical Analysis

Feds Waller: Supports 25 basis point hikes. See’s encouraging signs of wage moderation

Greg Michalowski

  • Favors a 25 basis point rate hike at the upcoming meeting and continued policy tightening beyond that
  • We have made progress is still considerable way to go toward 2% inflation goal
  • By early December that the policy stance was a slightly restrictive, time to slow, but not all the rate hikes
  • Recent CPI report good news, but don’t want to be head fake
  • Still cautious about inflation outlook, support continued monetary policy tightening
  • Expected continued slowing of US economy this quarter is desirable in a fight to lower inflation
  • Ample evidence that fed rate hikes are dampening demand in business sector.
  • Goal is not the whole economic activity, will be watching to see how moderation continues.
  • Expected consumer spending to moderate this year, supporting job at one of maintaining progress on inflation.
  • Labor market is strong, tight in face of higher rates, allowing fed to focus on lowering inflation. Waller sees encouraging signs of wage moderation, need to see more evidence of slowing.
  • Still optimistic that a soft landing as possible

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