US Inflation Still High: Christopher Waller Discusses Fed’s Next Move and Economic Outlook
Christopher Waller, a prominent member of the US Federal Reserve, expressed support for pausing interest rate cuts due to uneven progress in inflation. In a February 17 speech in Sydney, Australia, Waller acknowledged that January’s inflation data was disappointing but indicated that if the economic outlook in 2024 improves, rate cuts might eventually become necessary. Waller, who chairs the Fed Board’s payments subcommittee, emphasized that the current monetary policy is restricting economic activity and keeping inflation pressures under control.
Fed’s Impact on Bitcoin and Crypto Markets
Historically, the Fed’s rate cuts are seen as positive for Bitcoin (BTC) and the broader crypto market. Lower borrowing costs typically encourage investors to take on more risk, favoring assets like Bitcoin. Waller suggested that if the economic slowdown continues as seen in previous years, further easing of monetary policy could become appropriate. However, for now, he believes holding interest rates steady is the best course of action.
Market Reactions and Inflation Expectations
Inflation has remained more persistent than expected, causing markets to push back their expectations of further rate cuts. According to CME Group’s FedWatch Tool, the probability of a minimal 0.25% rate cut at the upcoming March Fed meeting is just 2.5%. Despite inflation readings being lower than in January 2024, Waller acknowledged they are still too high.
Trump’s Trade Tariffs and Inflation
Waller also commented on the impact of President Donald Trump’s trade policies, specifically tariffs. He suggested that White House tariffs would have a modest and non-persistent effect on inflation. However, he cautioned that other policies being discussed could potentially alleviate inflationary pressures by improving supply chains.
Conclusion
As inflation continues to be a challenge, the Fed’s stance remains cautious, with interest rates likely to stay steady for now. The Federal Reserve will continue to monitor economic conditions and adjust policies accordingly, while the broader impact of external factors like tariffs also plays a role in the inflation landscape.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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