Alberto G. Musalem
- Risks to the jobs market have remain unchanged or have fallen
- Fed may be on the 'last mile' to price stability, inflation expected to converge to 2% over the medium term
- Monetary policy well posited, Fed can 'judiciously and patiently' judge income data to decide on further rate cuts
- Strong economy on track for a 'solid' fourth quarter
- Growth is broad-balanced and driven by consumption, income growth, productivity, supportive financial conditions and wealth effects
- Recent high productivity could prove durably structural but that remains uncertain
- Core inflation remain elevated
- Pressure in services industries slowly abating
This is the third Fed official who has floated some more-hawkish hints. It's hardly a signal of a pause in December but early 2025 is going to be interesting. There are meetings in January, March and May. Assuming a cut in Dec, there is one cut fully priced in for that period (and a smidge more).
That sounds about right based on the comments and data but that's going to swing based on the next set of numbers and beyond.
