Fed Governor Governor Christopher Waller told CNBC that if August and September jobs report show growth in 800k range, that would be “substantial progress”. Fed could then be “ready to do an announcement in September” on tapering asset purchases.
“That depends on what the next two job reports do,” he added. “If they come in as strong as the last one, then I think you’ve made the progress you need. If they don’t, then you’re probably going to have to push things back a couple months.”
“In my view, with tapering we should go early and go fast in order to make sure we’re in position to raise rates in 2022 if we have to,” he said. “I’m not saying we would, but if we wanted to, we need to have some policy space by the end of the year.”
Waller also expected inflation to return to normal once the impacts of the pandemic wane. “My concern is just anecdotal evidence I’m hearing from business contacts, who are saying they’re able to pass prices through. They fully intend to. They’ve got pricing power for the first time in a decade,” he said. “Those are the sorts of issues that make you concerned that this may not be transitory.”
