Waller joined the Fed in December
Get used to hearing from Waller because his term runs until January 2030. He was a Trump nominee and this is his debut appearance to talk about the importance of central bank independence.
He comes from the St Louis Fed, which is led by wildcard Jim Bullard. He will take questions from Adam Posen shortly:
Waller is painting a consistent picture in his first appearance:
- “It’s not up to us to pick winners and losers”
- We have no role in climate change
- Speech about Fed independence and not financing deficits
- Quoting Milton Friedman
Maybe I’m rushing to judge but we’ll see what comes next.
- Current moves in yields show that US economy is improving; they don’t appear to be going up in a ‘bad fashion’. It reflects a good economy
That’s a similar line from the core of the Fed.
- “We are a long way from raising rates at this point”
- Any discussion of overheating has to be tied to inflation
- I’d worry if inflation expectations became unanchored on the upside it would be problem
- We could use supervisory tools to guard against asset inflation risk
- Says he likes to look at 5yr/5yr forwards as a measure of inflation expectations