Maybe QT extends out longer/Fresh read on container prices/Overseas stuff/KB Homes

Well, maybe QT doesn't end as soon as Dallas Fed president Lorie Logan implied last weekend as NY president John Williams pushed back and seems to be more focused on the level of bank reserves that will dictate the pace of QT rather than when the reverse repo facility shrinks to something close to zero as Logan talked about. In his speech yesterday he said "In its plans, the FOMC said that to ensure a smooth transition it intends to slow and then stop the decline in the size of the balance sheet when reserve balances are somewhat above the level it judges to be consistent with ample reserves. So far, we don't seem to be close to that point." My bold for emphasis. 

The other thing of note from Williams, and something I keep trying to mention, was the use AGAIN of the word 'sustained.' He said "I expect that we will need to maintain a restrictive stance of policy for some time to fully achieve our goals, and it will only be appropriate to dial back the degree of policy restraint when we are confident that inflation is moving toward 2% on a sustained basis."

In other words, it is not the downside of the inflation spike that will comfort the Fed completely, it is inflation staying down that will matter and drive the pace of rate cuts. 

And all we have to do is again look at shipping rates to test the idea of inflation staying down. The World Container Index updated its shipping price figures today and for the week ended 1/11, the Shanghai to Rotterdam container price of a 40 ft box rose to $4,406 from $3,577 which compares to $1,667 in the last week of December. The Shanghai to LA container cost was up more modestly to $2,790 vs $2,726 in the week before and vs $2,100 in the week before that.