Central Bank Watch: Fed Speeches, Interest Rate Expectations Update - Thursday, Aug. 12

August 4 – Bullard (St. Louis president) tried to soothe-say markets regarding high inflation readings, having noted that “it’s going to be more persistent than what most people expect....I’d expect something between 2.5 and 3% in 2022. It is going to come down, but not as fast as what many people have in mind.”

Clarida (Fed Vice Chair) commented on the surge in delta variant cases, saying “the monetary and fiscal policies presently in place should continue to support the strong expansion in economic activity that is expected to be realized this year, although, obviously, the rapid spread of the Delta variant among the still considerable fraction of the population that is unvaccinated is clearly a downside risk for the outlook.”

Kaplan (Dallas president) chimed in on the taper timeline, noting “as long as we continue to make progress in July (jobs) numbers and in August jobs numbers, I think we’d be better off to start adjusting these purchases soon.”

August 5 – Waller (Fed governor) took an optimistic tone, saying “the economy has rebounded in an amazing way, and I think that’s going to continue. I have very high hopes for very high jobs reports coming out tomorrow and the following month.”

Kashkari also looked for a silver lining, noting that he’s “optimistic that we should have a strong labor market in the fall, but the wrinkle now, so to speak, is delta.”

August 9 – Bostic (Atlanta president) came out with a hawkish tone hinting at a faster taper timeline, saying that the US economy is “well on the road to substantial progress toward our goal.”

August 10 – Evans (Chicago president), a noted dove, said that he does “expect that we are going to be at the point where we’ve seen substantial further progress later this year -- probably later this year. I don’t think it’s going to be into next year.”

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