Fed's Waller: No rush to cut rates amid sticky inflation data

Source Fxstreet

Federal Reserve Governor Christopher Waller said on Wednesday that recent weak inflation data supports the case for Fed holding off on cutting its short-term interest rate target, per Reuters.

Key quotes

"There is no rush to cut the policy rate.” 

“Fed may need to maintain current rate target for longer than expected.”

“Needs to see more inflation progress before supporting rate cut.”“Needs at least a couple of months of data to be sure inflation heading to 2%.”

“Still expects Fed to cut rates later this year.”

“Economy’s strength gives Fed space to take stock of data.”

“Data suggests fewer rate cuts possible this year.”

“Economy is growing at a healthy pace.”

“Despite progress on inflation, recent data has been disappointing.”

“Data has showed mixed messages on jobs front.”

“Fed has made a lot of progress lowering inflation.”

“Wage pressures have been easing.”

“Unsure productivity will keep at current strong pace.”

Market reaction 

The US Dollar Index attracts some buyers following the above hawkish comments. The DXY is trading 0.11% higher on the day at 104.40, as of writing.

 

Fed FAQs

Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.

The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.

In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.

Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Bitcoin Drops Below $83,000 as US Government Transfers Over 10,000 BTC, Sparking Panic Over Potential Selling PressureUS government transfers over 10,000 BTC as Bitcoin extends losses to breach $83,000, but a further sharp decline remains unlikely.On October 8, Bitcoin (BTC) extended its recent losses, f
Author  TradingKey
11 hours ago
US government transfers over 10,000 BTC as Bitcoin extends losses to breach $83,000, but a further sharp decline remains unlikely.On October 8, Bitcoin (BTC) extended its recent losses, f
placeholder
Gold falls to a two-month low as real yields bite — can $4,000 hold?Gold hit a two-month low on 7 October, with spot touching roughly $4,090 and COMEX December futures closing at $4,140.70, even as the New York Fed's one-year inflation expectation rose to 3.9% — its highest since May 2023. The paradox resolves through real yields: the 30-year Treasury yield reached 5.732% intraday, its highest since 2002. Here are the levels, the institutional split, and the scenarios into tonight's jobless claims and 30-year auction.
Author  Irene Q.
11 hours ago
Gold hit a two-month low on 7 October, with spot touching roughly $4,090 and COMEX December futures closing at $4,140.70, even as the New York Fed's one-year inflation expectation rose to 3.9% — its highest since May 2023. The paradox resolves through real yields: the 30-year Treasury yield reached 5.732% intraday, its highest since 2002. Here are the levels, the institutional split, and the scenarios into tonight's jobless claims and 30-year auction.
placeholder
Gold Price Forecast: Gold Drops Below $4,100, Could Test $4,000 in Short TermAs of the Asian session on October 8, gold prices (XAUUSD) maintained a weak rebound trend today, with the latest price trading around $4,120; yesterday, gold prices briefly fell below $4
Author  TradingKey
11 hours ago
As of the Asian session on October 8, gold prices (XAUUSD) maintained a weak rebound trend today, with the latest price trading around $4,120; yesterday, gold prices briefly fell below $4
placeholder
Euro slides to a 17-month low as France's budget crisis spreads — can 1.12 hold?EUR/USD touched 1.1162 on 5 October, its weakest level in 17 months, as France's budget standoff pushed the 10-year OAT above 5% and the OAT-Bund spread to roughly 160bp — the widest since the 2011-12 eurozone debt crisis. The euro now trades near 1.1215 ahead of US jobless claims and a $22 billion 30-year Treasury auction. Here are the levels and the two scenarios to watch.
Author  Irene Q.
12 hours ago
EUR/USD touched 1.1162 on 5 October, its weakest level in 17 months, as France's budget standoff pushed the 10-year OAT above 5% and the OAT-Bund spread to roughly 160bp — the widest since the 2011-12 eurozone debt crisis. The euro now trades near 1.1215 ahead of US jobless claims and a $22 billion 30-year Treasury auction. Here are the levels and the two scenarios to watch.
placeholder
Today’s Market Recap: 10-Year Treasury Yield Hits Highest Since 2002,U.S. Stocks Fall as Brent Barely Holds $100Tracking the Market TrendTradingKey - On October 7, U.S. Eastern Time, the 10-year Treasury yield climbed to an intraday high of 5.36%, its highest level since 2002, while all three major U.S. stock i
Author  TradingKey
18 hours ago
Tracking the Market TrendTradingKey - On October 7, U.S. Eastern Time, the 10-year Treasury yield climbed to an intraday high of 5.36%, its highest level since 2002, while all three major U.S. stock i
goTop
quote