When you title a speech "There's Still No Rush", you have a point to make/Company comments, including Gary Friedman

You really have something to say about what you want the cadence of rate cuts to be as the whole world watches when you title your speech "There's Still No Rush." This from the same guy who gave a speech in November 2023 titled "Something Appears to Be Giving" and where he said they could be cutting rates within 3-5 months. "It has nothing to do with trying to save the economy. It is consistent with every policy rule. There is no reason to say we will keep it really high." That further stoked the asset price rally into year end that continues to this day and that is completely unbothered by what he said last night, bizarrely I believe. 

I say bizarrely because higher for longer interest rates is a real thing and should not be ignored, but it is. Waller said last night after mentioning the progress they've made towards their inflation goal and with the labor market now in "better balance", he said "But the data we have received so far this year has made me uncertain about the speed of continued progress." He still wants to cut interest rates this year upon further progress, "But until that progress materializes, I am not ready to take that step" and because he said the US economy is strong and the labor market is resilient, "the risk of waiting a little longer to ease policy is small and significantly lower than acting too soon and possibly squandering our progress on inflation."

In other words, a weaker economy is more the trigger for sooner rather than later rate cuts and less so a further slowing in inflation. To this, at the end of his speech he said "in the absence of an unexpected and material deterioration in the economy, I am going to need to see at least a couple months of better inflation data before I have enough confidence that beginning to cut rates will keep the economy on a path to 2% inflation." 

He also was rather skeptical of the recent rebound in productivity as it comes after a string of weakness where over the past few years overall productivity is only averaging about 1.25% per annum, rather lackluster. He laid out his case.

So two things here, Waller joins voting member Bostic in wanting to wait and only likely expecting 1-2 cuts this year and Powell and Michelle Bowman likely are in this corner I'd say. The other, can we finally throw out the dot plot in the garbage as its relevancy is really only one day? I say this because it is only a snapshot of what members think on the day of the meeting and those thoughts can change by the next day. And, there is no differentiation between voters and non-voters.