Fed's Waller: 'More aggressive' response may be needed if inflation stays high

An eagle tops the U.S. Federal Reserve building's facade in Washington, July 31, 2013. REUTERS/Jonathan Ernst/File PhotoWASHINGTON, Oct 19 - If inflation keeps rising at its current pace in coming months rather than subsiding as expected, Federal Reserve policymakers may need to adopt "a more aggressive policy response" next year, Fed Governor Christopher Waller said on Tuesday.

The Fed's most recent "dot plot" depicting policymakers' rate-hike expectations show about half seeing the Fed lifting rates by the end of next year, with the other half expecting liftoff by the end of 2023. "If monthly prints of inflation continue to run high through the remainder of this year, a more aggressive policy response than just tapering may well be warranted in 2022," Waller said.

"We can worry about the employment leg, but if inflation expectations come unanchored, we've got to put that aside and get those expectations reanchored - everything hinges on that," he said. "The minute we start seeing anything that looks like unanchoring, you are going to see some action to get those things back in place."To make room for such action, if needed, Waller has been pushing for the Fed to start trimming its $120 billion in monthly asset purchases.

Most Fed policymakers agree with Waller that it will soon be time to taper, and they are widely expected to announce a decision to do so when they meet in early November.

That’s what she said

nice

True, but they won’t mount said response because they are all cowards paid for by the 1%

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