$AGT $R2 $42 【Mixed Fed signals: They say they won’t focus on a single data point, yet set a “make-or-break threshold” for CPI?】
Since taking office, Warsh has repeatedly stressed: Don’t rely too heavily on forward guidance, and don’t base decisions on a single data point. But Waller suddenly struck a hawkish note: If core CPI rises 0.3% month over month or more in October, the Fed should consider a 50-basis-point hike in December. A few hours later, the figure came in at exactly 0.3%, Treasury yields jumped instantly, and the market was left scratching its head.
What’s more, Waller voted for 25-basis-point rate cuts last July and this January, and said as recently as March that he favored cutting rates this year if the labor market weakened. In just seven months, he’s gone from a rate-cut supporter to signaling a “50-basis-point hike”—a startling about-face.
A 50-basis-point hike has been extremely rare over the past 30 years. And with oil prices down nearly 20%, inflation swap rates retreating, and the AI boom cooling, the timing of this hawkish signal is puzzling. Internal disagreements are normal, but contradictory public signals make it impossible for markets to form stable expectations.
McGeever asks: If CPI had come in at 0.246% rather than 0.296%, would Treasury yields still have jumped 20 basis points? Setting a clear threshold for a single data point is exactly what leads markets to fixate on one number—and directly conflicts with Warsh’s principle of “watching trends, not isolated data points.” What the Fed needs most right now may not be hawkishness, but clear communication. #美联储 #沃勒 #沃什 #cpi
Since taking office, Warsh has repeatedly stressed: Don’t rely too heavily on forward guidance, and don’t base decisions on a single data point. But Waller suddenly struck a hawkish note: If core CPI rises 0.3% month over month or more in October, the Fed should consider a 50-basis-point hike in December. A few hours later, the figure came in at exactly 0.3%, Treasury yields jumped instantly, and the market was left scratching its head.
What’s more, Waller voted for 25-basis-point rate cuts last July and this January, and said as recently as March that he favored cutting rates this year if the labor market weakened. In just seven months, he’s gone from a rate-cut supporter to signaling a “50-basis-point hike”—a startling about-face.
A 50-basis-point hike has been extremely rare over the past 30 years. And with oil prices down nearly 20%, inflation swap rates retreating, and the AI boom cooling, the timing of this hawkish signal is puzzling. Internal disagreements are normal, but contradictory public signals make it impossible for markets to form stable expectations.
McGeever asks: If CPI had come in at 0.246% rather than 0.296%, would Treasury yields still have jumped 20 basis points? Setting a clear threshold for a single data point is exactly what leads markets to fixate on one number—and directly conflicts with Warsh’s principle of “watching trends, not isolated data points.” What the Fed needs most right now may not be hawkishness, but clear communication. #美联储 #沃勒 #沃什 #cpi
