Fed's Waller Signals No Rush to Cut Rates Despite Eyeing Cuts This Year
• Fed Governor Waller's speech outlined economic data the Fed will monitor before cutting rates, signaling no rush to ease policy despite still expecting rate cuts this year.
• Key upcoming inflation data like PCE and CPI reports will indicate if January inflation was an outlier or disinflation progress is reversing.
• Inflation swaps show expectations for higher near-term inflation rates, driving up breakeven inflation expectations.
• Factors like rising gas prices, shipping rates, business pricing intentions point to possible firmer future inflation.
• Data trends question whether 3 rate cuts are likely in 2024, and if policy tightness is sufficient with inflation above target and strong growth.