- If short-term expectations rise, that is worrying and the Fed may have to take steps
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It is unlikely that the Fed will be able to return to the small balance sheet of 2008
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The Fed wants to operate a broad reserve-type system
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He doesn’t want to go into a rare reserve system
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He did not talk to Warsh about politics
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It is crazy, in light of recent data, to talk about interest rate cuts in the near future
Waller is a highly influential member of the Federal Reserve Board of Governors. Nominated by President Trump and confirmed in 2020, he is serving a term expiring in 2030. He is widely known in macroeconomic circles for his sharp academic background and historically practical, data-driven approach to monetary policy. His pragmatism now leans toward the hardline side.
Waller adds:
- I have very strong beliefs that the central bank should be independent.
The comments come ahead of the swearing-in of new Fed Chairman Kevin Warsh, where President Trump is also scheduled to speak. Many viewed Trump’s nomination of Warsh as more cautious than other potential nominees, especially in light of the administration’s preference for low interest rates. However, during his time at the Fed, Warsh was often viewed as more pragmatic and, at times, leaning toward the hawkish side on inflation and financial stability concerns. Ultimately, as with all Fed officials, its policy stance is likely to depend largely on the direction of the economy, inflation trends, and labor market conditions.
