February 15th
Vice Chairman, Financial Supervisory Service:
- The FOMC is confident that it is on a path to 2% inflation.
- I fully support a cautious approach to policy normalisation.
- I need to see good data that continues before the start of the rate cut.
- The FOMC plans an in-depth discussion on the balance sheet issue soon.
- The Fed’s balance sheet contraction is going smoothly, and its reserves are sufficient.
- Significant reverse repo serves as a buffer, and I am pleased that the use of the standing repo facility is steadily increasing.
- There are no signs of liquidity problems throughout the financial system, and the situation is being monitored carefully.
- The January CPI report reminds us that the road to 2% inflation could be bumpy.
- The soundness of the banking system is resilient, and risks include parts like commercial real estate.
- January indicators showed stronger-than-expected strength in both employment and inflation, and the Fed is looking at the overall numbers.
- Data suggests the Fed is on a good path, but shows it’s still too early to say a soft landing.
- High interest rates have dampened both sales and purchases of existing homes.
- The end of the reduction of the valcit is not long before February 15
Waller Director:
- Forward guidance will also have to inform the possible path of policy rates.
- One of the lessons from 2020 is that forward guidance needs to be more flexible.
- The Fed’s guidance may have been too limited.
- Waller’s move is more realistic…
But in the end, it’s a luxurious expression of “I don’t even know.”