Along with the release of the January Fed minutes this week, there was a deluge of Fed Speak, with Jefferson, Harker, Waller, and Cook all opining on the outlook for cuts. Most of the refrain was along the lines of Powell’s need for “confidence”, with Waller saying that he needed “to see at least another couple more months of inflation data” and Cook echoing the idea, saying that “as we gain greater confidence that disinflation is ongoing and sustainable, that changing outlook will warrant a change in the policy rate”. Harker pushed back on immediate cuts, asking for markets to “just give us a couple of meetings”, following up by saying, “I would caution anyone from looking for it right now and right away”. But while there may be some pushback on timing, that cuts are coming appears to be very much fait accompli in the mind of the Fed.
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