- Will support further cuts in 2025 but pace will depend on inflation progress.
- Inflation will continue to make progress towards 2%.
- Base effects will improve inflation in 2025.
- Recent monthly and short-term data indicates improvement to come.
- Although the recent inflation progress has been slow, much of that is due to imputed prices for housing and non-market services that are less reliable guide to underlying price pressures.
- Geopolitical conflicts and tariffs could be a source of renewed price pressure.
- The economy is overall on a solid footing, nothing suggests labour market will weaken dramatically in coming months.
- Central bankers have a broad set of challanges ahead, from aging populations to geopolitical conflicts and challanges to globalization.
- Do not expect tariffs to produce persistent inflation and thus are not likely to influence views on appropriate monetary policy.
- Long term yields may have more of an inflation premium, but the Fed will fix that.
- US deficits may also be driving long yields higher.
- Some of the ongoing service price inflation may represent lagged wage increases which should ease.
- Tremendous uncertainty around what will happen with tariffs.
- Do not think "draconian" tariffs will be implemented.
- In the near term, do not think there will be a huge impact on inflation from tariffs.
Fed's Waller
