Fed's Waller (voter) says if expectations over the next 2/3/4 years rise, that is a problem
- Typically prefer market-based measures of inflation expectations.
- If shorter run expectations go up, that is alarming, may have to take steps then.
- No way we could go back to the small balance sheet of 2008.
- Want to run an ample reserve type system.
- Do not want to go back to a scarce reserve system.
- Have not spoken to incoming Fed Chair Warsh about policy.
- It is "crazy" given recent data, to be talking about rate cuts in the near future.
- I have very strong beliefs in the need for central bank independence.
- Recent labour and inflation data turned me on rate bias.
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