If shorter run expectations go up, that’s alarming and the Fed might have to take steps
There is no way the Fed can go back to the small balance sheet of 2008
The Fed wants to run an ample reserves type system
Does not want to go to a scarce reserve system
Has not spoken to Warsh about policy
It’s crazy given recent data to be talking about rate cuts in the near future

Waller is a highly influential member of the Board of Governors of the Federal Reserve. Nominated by President Trump and confirmed in 2020, he serves a term ending in 2030. He is widely known in macroeconomic circles for his sharp academic background and historically pragmatic, data-driven approach to monetary policy. His pragmatism is tilting to the hawkish side now.

Waller adds:

I have a very strong beliefs in the need for central bank independence.

The comments come ahead of the swearing-in of new Fed Chair Kevin Warsh, where President Trump is also scheduled to speak. Warsh’s nomination by Trump was viewed by many as leaning more dovish relative to other potential candidates, particularly given the administration’s preference for lower interest rates. However, during his time on the Fed Board, Warsh was often seen as more pragmatic and, at times, tilted toward the hawkish side on inflation and financial stability concerns. Ultimately, as with all Fed officials, his policy stance is likely to depend heavily on the direction of the economy, inflation trends, and labor market conditions.

Looking at the stocks heading into the swearing in:

Dow is up 0.62% and moving further away from the 50,000 level. The price is trading at 50,612
S&P is up 41 points or 0.55% at 7486. A record close would be at 7501.25. The high reached 7499.46
Nasdaq is up 174 points or 0.66% at 26467. The high close level is up at 26635

In the US debt market: