Fed Member: It's crazy to talk about a rate cut considering recent data

The director of the Fed (Federal Reserve, the North American central bank) Christopher Waller said this Friday (22) that it is "crazy" to talk about cutting interest rates in the near future, considering recent economic data.

When participating in a question and answer round at the Frankfurt School of Finance & Management, he stated that if expectations increase over two, three or four years, this will be a problem.

"If short-term inflation expectations increase, this is alarming and we may have to take action," warned the director, without providing further details.

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"I typically prefer market-based measures of inflation expectations," he added.

Waller, who was in the running to succeed Jerome Powell as president of the Fed, assessed that there is no way back to the reduced balance sheet of 2008. For him, however, the American Central Bank could reduce reserves by US$300 billion to US$500 billion.

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The director also said that he has always been "and always will be" a fan of central bank independence, amid debates about the institution's possible loss of independence in the face of interference attempts by US President Donald Trump.

Chosen to lead the Fed, Kevin Warsh defends the reduction of the balance sheet of the American Central Bank and was at the center of discussions about the institution's autonomy in relation to the direction of US monetary policy. Warsh's inauguration ceremony takes place this afternoon at the White House.

Source: CNN