Two interesting bits from the speech that I liked:
First, the gap in performance of the interest rate sensitive sectors such as manufacturing of business equipment vs the rest of the economy is an indicator of how restrictive policy is - aka, how far we are from neutral - for Waller.
First, the gap in performance of the interest rate sensitive sectors such as manufacturing of business equipment vs the rest of the economy is an indicator of how restrictive policy is - aka, how far we are from neutral - for Waller.
Comments
I personally think neutral's closer to 3.5-3.75, but who really knows? But I do think the next 2-3 cuts are easy.
These two points highlight why Waller's dovish and also add to our framework for analyzing their reaction function in the future.