Christopher Waller is a member of the Federal Reserve Board of Governors. Earlier remarks are here:
He is still going, covering a wide range of topics. Bolding below is mine.
On the economy, housing, stocks
- it doesn't look like we are moving into stagflation
- may see inflation that's too high, but it won't be coupled with a bad labor market
- infrastructure bill, with spending spread out over 10 years, is likely to have less an impact on inflation
- drop in unemployment rate has been 'mind-boggling'
- don't see a need for more stimulus from the authorities at this time
- have been very concerned about housing prices
- work-from-home has created fundamental change in demand for housing
- house prices are also rising because of demand from younger generation, low interest rates, lack of supply
- if stock prices fall, that's typically not going to cause stresses in the banking system
On crypto:
- I believe we need congressional authority to do a central bank digital currency
- bitcoin is like electronic gold, a store of value without intrinsic value
- I don't think bitcoin ever will be a payment instrument
- stablecoin could be a competitor in payments, but need work on regulatory front to ensure they are safe payment instruments
- people don't have a demand for central bank digital currency because they don't know what it is
- China's digital currency doesn't threaten global domination of the dollar
Back to the economy, and policy:
- don't see anything that resembles a credit bubble
- everything hinges on inflation expectations
- the minute we see any unanchoring in inflation expectations, you'll see action from the fed
- if inflation continued at 5% into 2022, will start seeing fed policymakers pulling their rate hike expectations earlier
- have not yet approached question of balance sheet normalization
- right now the biggest risk is that inflation doesn't come down, for some reason we can't anticipate
- we are ready to stop high inflation if we have to
