Comments from Fed Governor Waller
- Says favors ending taper by mid-2022 to allow for rate hike if needed
- Fed should start tapering asset purchases following its Nov meeting
- Taper is priced in, should not impact financial conditions
- Do not expect liftoff to occur soon after tapering is completed; liftoff is still some time off
- 'More aggressive policy response' may be needed if inflation stays high through 2021
- Will favor earlier liftoff if inflation runs considerably above 2% well into 2022
- Have regained 85% of lost jobs during pandemic
- Expects H1 2022 rebound after Q3 GDP slowdown due to covid resurgence and supply chain issues
- May see 'very healthy' job gains in Q4
- Don't see stagflation. We may see inflation too high but it won't be coupled with a bad labor market
Waller sometimes sounds like a hawk but this is very close to what Powell is saying.
