Comments from the Fed's Waller:

Comments from the Fed's Waller:
  • The next five months are critical for seeing whether inflation is transitory
  • Inflation is the Fed's biggest upside risk
  • Central bank digital currency should be a question for congress
  • I've always had a very optimistic outlook for the US economy+
  • There should be no big market shock when tapering begins
  • Tapering fits with US economic outlook

This is an important step because it tees up commentary on what the Fed will do after the taper for the middle of Q2. That will be the time when they'll have to clearly signal rate hikes and the pace they're coming. If not, they'll have to push back.

The problem I see is that supply chain issues might not be sorted out by then and they might be tricked into a hawkish shift, only to see those issues resolve later and prices fall quickly.