₱ⱤØⱠł₣ł₵ JØł₦₮Ⱬ on Nostr: Chris Waller says he expects inflation to continue declining to 2% and doesn’t ...
Chris Waller says he expects inflation to continue declining to 2% and doesn’t sound — at all — like someone ready to declare or even hint at an end to cuts.
Key quote: “My bottom-line message is that I believe more cuts will be appropriate.”
On the inflation forecast, Waller is optimistic because:
• 6-month annualized inflation is heading lower (core was 2.4% in November, better than the 2.8% YoY rise)
• Most of the stickiness in inflation is coming from imputed prices, which is one-third of the core price basket and a “less reliable guide” to supply-demand imbalances
• Base effects could bring the YoY inflation reading down by March if the next few months don’t pop back up
Waller: “Minimal further progress” on 12-month inflation readings “has led to calls to slow or stop reducing the policy rate. However, I believe that inflation will continue to make progress toward our 2% goal over the medium term and that further reductions will be appropriate.”
Key quote: “My bottom-line message is that I believe more cuts will be appropriate.”
On the inflation forecast, Waller is optimistic because:
• 6-month annualized inflation is heading lower (core was 2.4% in November, better than the 2.8% YoY rise)
• Most of the stickiness in inflation is coming from imputed prices, which is one-third of the core price basket and a “less reliable guide” to supply-demand imbalances
• Base effects could bring the YoY inflation reading down by March if the next few months don’t pop back up
Waller: “Minimal further progress” on 12-month inflation readings “has led to calls to slow or stop reducing the policy rate. However, I believe that inflation will continue to make progress toward our 2% goal over the medium term and that further reductions will be appropriate.”