Federal Reserve governor Christopher Waller has detailed he is ready to get behind 50 bps rate hikes until the extreme inflationary pressures plaguing the U.S. economy subsides. Waller stressed that until inflation is reduced he doesn’t “see the point of stopping” 50 bps rate hikes. Furthermore, statistics from the U.S. Bureau of Economic Analysis show that American savings have plummeted to levels not seen since the ‘Great Recession’ in 2008.
I am advocating 50 [basis point hikes] on the table every meeting until we see substantial reductions in inflation. Until we get that, I don’t see the point of stopping.
Waller stressed that in time, the Fed’s monetary policy will deliver results and show how things are working. “Over a longer period, we will learn more about how monetary policy is affecting demand and how supply constraints are evolving,” he noted in his speech. “If the data suggest that inflation is stubbornly high, I am prepared to do more.”
In fact, Waller seems to think the Fed can be well above neutral and he wholeheartedly believes the central bank can get the benchmark rate back down to 2%. “In particular, I am not taking 50 basis-point hikes off the table until I see inflation coming down closer to our 2 percent target,” Waller said. “And, by the end of this year, I support having the policy rate at a level above neutral so that it is reducing demand for products and labor, bringing it more in line with supply and thus helping rein in inflation.”
Meanwhile, the gold bug and economist Peter Schiff is not so hopeful about the Fed doing its job and he doesn’t believe Jerome Powell’s strong balance sheet claims. Schiff brought up the fact that Americans are tapping into their savings to deal with the troubled economy. The U.S. Bureau of Economic Analysis has released data that shows personal savings in the U.S. has dropped to the lowest levels since September 2008.
What do you think about the Federal Reserve governor Christopher Waller’s opinions? What do you think about the latest U.S. savings data and Peter Schiff’s comments? Let us know what you think about this subject in the comments section below.