- The data is basically screaming at us to go for 50 bps but geopolitical called for caution
- The debate about 25-50 bps will continue at upcoming meetings
- US doesn't have much direct exposure to Russia but trading partners do
- Russia could knock off 0.5 percentage points from US growth but it will still be very strong
- I continue to be in favor of front-loading rate hikes
- Pulling that forward would imply 50 bps "at one or more" upcoming meetings
- We should be much higher than we are right now on rates
- Asked about year-end rates, says Fed should be closer to neutral
- His projection is to be above 2-2.25% by the end of the year
- Says he continues to advocate for reducing balance sheet before July meeting
- "Inflation is raging"
- Says Fed in the position to draw down a large amount of liquidity without having a negative effect, though could be a bit more cautious due to Ukraine
- There hasn't been a lot of market turmoil since we made the pivot in November
- I still think supply chain issues will begin to resolve by year end or early next year
- Says he would be more concerned if he saw inflation expectations two years out become de-anchored
- 2-year out inflation expectations, are not that high
Waller pushed up USD/JPY to a fresh 6-year high at 119.25 on Waller's comments, initially jumping 15 pips. The weekly close for USD/JPY today is key:
