More from Fed's Waller: If inflation fell to 2.5%, Taylor rule would say to cut rates

<p>Still hopeful rate hike's will slow spending, inflation</p><p>More from Fed's Waller:</p><ul><li>We can run our balance sheet down a total of $2 trillion to $2.5 trillion and keep reserves ample</li><li>If saw inflation coming down to 2.5%, Taylor rule would say to cut rates</li><li>We need to see how inflation progresses in 6 to 12 months, then see about cutting rates</li><li>We still have one rate hike penciled in, will be totally driven by the data if it happens or when</li><li>Higher long rates for whatever reason puts in tightening</li><li>If long rates go up and persist, that will do some of the Fed to work</li><li>Still seems to be more potential excess consumer saving than people think</li><li>Consumer spending has been surprising</li><li>Still hopeful rate hike's will slow spending, inflation</li><li>Data shows job market can call the a reduction in job vacancies and not necessarily loss of jobs</li><li>Events in Middle East horrific, but hard to see much impact on US macroeconomy</li><li>Balance sheet reduction was priced in a long time ago. All Fed is doing now is fulfilling that expectation</li></ul>

This article was written by Greg Michalowski at www.forexlive.com.