In love, the first cut may be the deepest (as per Rod Stewart, Sheryl Crow, and others). But for the Fed’s Waller, the first cut is to be done “methodically and carefully”. Tacky musical references aside, the Fed Governor explained in his speech earlier this week that “the data we have received the last few months is allowing the Committee to consider cutting the policy rate in 2024”. With inflation seemingly on the right path for reaching the FOMC’s “price-stability goal”, Waller was yet another confirmation of the adjustment cut thesis, explaining in his conclusion, “The healthy state of the economy provides the flexibility to lower the (nominal) policy rate to keep the real policy rate at an appropriate level of tightness.”
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