- The next couple of points of inflation will be pretty important.
- Even if get better data on inflation, should be cautious on rates
- if labor market stays stronger, better inflation data doesn’t necessarily mean Fed can cut.
- Also focused on geopolitical, policy changes.
- We are taking our time to see how these affect economy.
- There is a lot of optimism among Texas banks on loan demand, economic growth.
- Need tailoring of banking regulation, based on size as well as risk profile
- Critically important that every bank is set up to use the Fed’s discount window.
- Still are some banks that are not signed up to discount window, still some that have not tested it.
- Some of the increase in longer-term rates came from expectations from stronger economic growth, expectation Fed policy rate will stay high for longer.
- Level of long rate is a key factor in assessing financial conditions
- We will lower rates further if we need, that’s not where we are right now.
- Right now the focus is on restoring 2% inflation.
This article was written by Greg Michalowski at www.forexlive.com.
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