Federal Reserve governor Christopher Waller came to Sydney with a mea culpa, a little hint of self congratulations and a message about what will guide the world’s most important central bank as it considers the path of US interest rates over the next 12 months.that will be heard around the world.Michael Quelch
The worst thing the Fed could do, Waller said, was to stop raising rates and risk a renewed burst of inflation like the one last year that he admitted caught the Fed flat-footed. Waller acknowledged that the central bank “probably should have tightened sooner than we did” at that time, and there seems to be a clear resolve not to let that happen again.“So everybody should just take a deep breath and calm down,” Waller said. “We’ve got a ways to go.
The unspoken warning to investors was clear: if you get too excited now, then you’ll only make our jobs harder.While Waller was prepared to acknowledge that the Fed was too far behind the curve when it started to raise rates in March, he also seemed pleased with the way its tightening cycle has gone.