00:00 Speaker A
With Federal Reserve officials offering insight into the central bank’s read on the economy this week, Federal Reserve Governor Christopher Waller saying the inflationary impact of President Trump’s tariffs will likely be temporary, while still leaving over open the possibility for rate cuts to come. Meantime, Federal Reserve Bank of Atlanta president Raphael Bostic saying officials must wait for clarity on the president’s policies before adjusting interest rates, saying now is the time to move boldly. Fed chair Jerome Powell set to speak at the Economic Club of Chicago tomorrow, but joining me to discuss all the Fed speak and how it might be related to earnings season. I’ve still got John Hilsenrath here in studio with me. So John, this Fed speak was interesting because Chris Waller kind of expecting inflation to be temporary, but also sort of talking about rate cuts to come and sort of running for Fed chair Powell’s position to come. Uh you have to take that with a little bit of a grain of salt.
01:22 John Hilsenrath
So well I mean Waller’s a really interesting character because he was ahead of the curve um last year and in previous years, and kind of seeing where the Fed was going and I think a a number of people in the market started to look to Waller as, you know, some indicator of where J. Powell was going. And he he kind of had that a little bit of that mystique. As you said, how are his motives changing now when he was appointed by President Trump in his first term? He might have a shot at becoming chairman when Powell’s job is up in a year or so. You know, is Waller now saying what the president wants to hear or what Powell is thinking? It might be some mix of the two. I think what Bostic said today is more the conventional view inside the Fed, which is and we were just talking about this off set about being in a wait and see mode. If you’re the CEO guiding earnings right now, or if you’re the chair of the Fed when there’s so much uncertainty and J. Powell said this in his press conference in March. When there’s so much uncertainty about where economic policy is going, you don’t want to get over your skis and start saying we’re we’re guiding down or we’re guiding up or we’re guiding anything because you don’t know either. And I think the Fed’s view right now is, let’s wait and see how this plays out. My own view is they don’t move anything until they see the whites of the eyes of the problem. And they don’t know what the problem yet is what the problem is going to be, whether the greater problem is inflation or unemployment and we might have both moving in the wrong direction over the next few months. So my own view and there there’s a market issue here. My own view is that the Fed is in a wait and see mode. The market has been pricing a Fed rate cut in June. Uh that started to shift over the last week, but last week they had a 95% probability of the Fed cutting in June. That’s come off a little bit. But we’ll hear what J. Powell has to say. I don’t see him moving the ball when he talks tomorrow.
05:00 Speaker A
And we’ll also hear what a slew of executives have to say as we continue our coverage of uh earning season this quarter and whether or not we hear any concerns about inflation or unemployment there as well, a key indicator. John Hilsenrath is going to stick with me. I also want to give you a programming note. You can tune in at 4:00 p.m. Eastern time today for Yahoo Finance exclusive interview with US Treasury Secretary Scott Benson. That’s coming up at 4:00 p.m. Eastern.
