Wall Street: the “pivot” will wait!

(Boursier.com) — New York Fed President John Williams yesterday welcomed signs of slowing inflation, but said more needed to be done to get back to the 2% target. Speaking at a Fixed Income Analysts Society event, Williams noted signs of slowing inflation as weaker demand, falling import costs and easing market disruptions supply chain are beginning to exert downward pressure on commodity prices. The official further noted that inflation expectations were also moving in a bearish direction. However, Williams added that inflation remained far too high, partly due to non-energy services, and that more work was needed to bring inflation back towards the 2% target. This will require a period of below-trend growth and some… easing in the labor market.

Fed Vice Chair Lael Brainard, meanwhile, spoke yesterday in favor of slowing the pace of rate hikes, although monetary policy may need to remain tight for some time. Despite a limited labor supply, wages do not appear to cause a wage-price spiral, Brainard also found.

Boston Fed leader Susan Collins reiterated her support for a 25 basis point move on Feb. 1, after the upcoming monetary meeting, even though she said rates are likely to rise above 5% after that. hold for some time at this level to bring inflation down.

Markets continue to expect a maximum rate in the 4.75 to 5% range, as well as two rate cuts by the end of the year. Fed officials, meanwhile, do not really change their speech, a little harsher than this consensus, many regional leaders of the bank anticipating a terminal rate above 5%.