- Asked about whether jobs data would change his view on terminal rates, he says December dot plot views are still 'very reasonable' due to totality of all data
- Fed will watch the data to determine path of rate rises
- There is a lot of uncertainty around inflation outlook
- Maybe services prices stay elevated, and if that happens we'll need higher rates
- Some underlying inflation numbers like Dallas Fed trimmed mean is around 3.75% and Fed funds is about 1 percentage point above that. To get sufficiently restrictive, you need to get higher than that.
- I broadly see financial conditions as having moved tighter
- I'm definitely seeing more positive signs on global growth and the US economy is also showing more resilience
- Demand is still very strong
- We're seeing a significant slowdown in housing, especially in permits but we're still seeing a lag in completions. So we might not see the construction sector job losses yet.
- Still seeing high demand for services and labor
- There may be some reasons to expect labor to loosen up
- Inflation expectations have stayed very well anchored
- Rent inflation looks to ebb over time
This was a candid appearance and Timiraos did a good job of probing on rates but he didn't tip his hand on hikes. He certainly kept the 5-5.5% range on the table but repeatedly highlighted data dependence. He did offer an encouraging take on the economy and I think that's ultimately what filters back into the rate outlook.