Waller Q&A: It will be up to committee on timing of when to start cuts

<ul><li>The economy is doing and giving us the flexibility to move carefully and methodically</li><li>We have to see firm evidence of improvement on rates</li><li>If we think we have to move faster on rates, we can but key is that we have flexibility</li><li>It will be up to committee on timing of when to start cuts</li><li>We're in an unusual place where we can move rates down without a shock to the economy</li><li>There are things we want to be careful about </li><li>Whether we miss the timing on rate cuts by six weeks, it hard to believe that's going to have a big effect on the economy</li><li>Once supply adjustment is complete [from the pandemic], it will be clearer whether demand is falling enough to finish the inflation fight, it's an issue to watch.</li><li>Approx endpoint for reserves is likely around 10-11% of GDP … overnight repo doesn't need to have anything in it</li><li>4% wage growth is a 'little high' but not much</li></ul><p>This was a good interview and there's some focus on the comments on the balance sheet and how a taper might unfold. Overall, the odds of a March cut have dipped while the market still sees 159 bps this year, which is more than double the 75 bps that Waller highlighted in the dot plot.</p>

This article was written by Adam Button at www.forexlive.com.