With Fed Likely Done Hiking Rates, Waller Flags Pivot Ahead

• Federal Reserve officials express comfort with maintaining current interest rates for the rest of the year, aiming for a "soft landing" for the U.S. economy.
• Fed Governor Christopher Waller is confident in the current policy's ability to slow the economy and bring inflation back to 2%, considering potential rate cuts if inflation continues to decline over the next few months.
• Waller's remarks led to a market reaction, with bond yields falling and investors adjusting expectations, indicating a higher probability of rate cuts starting in May and potentially decreasing by more than a full percentage point in 2024.
• Differing views within the Fed are evident, with Fed Governor Michelle Bowman expressing doubts about the durability of progress on inflation and Chicago Fed President Austan Goolsbee suggesting a sharp decline in inflation. The final pre-meeting communication is expected from Fed Chair Jerome Powell.

 (Source: Reuters)