Waller Says Fed Can 'Wait and See' About Rate Decision

The transcript discusses the current state of the economy, focusing on whether the real side is cooling or if prices are heating up. It suggests a wait-and-see approach for policy rate adjustments, depending on economic trends. If the real economy weakens, there may be room to delay rate hikes. However, if inflation stabilizes or accelerates, further policy tightening might be necessary. The speaker emphasizes monitoring core inflation and economic demand to guide future decisions.

What is the current stance on making changes to the policy rate?

• Increase the policy rate immediately.

• Wait and observe the economy's evolution.

• Decrease the policy rate immediately.

• Immediate changes are necessary.

If the real economy begins to soften, what is the suggested course of action?

• Increase the policy rate.

• Decrease the policy rate.

• Wait for further rate hikes and let longer-term rates work.

• Implement immediate policy tightening.

What might be necessary if the real economy shows strength and inflation stabilizes?

• Policy loosening.

• More policy tightening.

• No changes to policy.

• Immediate rate cuts.

What factors will be monitored to decide on future policy actions?

• Core inflation and spending strength.

• Global trade balances.

• Stock market performance.

• Unemployment rates.

What is the potential impact of continued strength in spending and investment?

• Decrease in inflation.

• Stabilization or re-acceleration of inflation.

• Immediate economic recession.

• Increase in unemployment.