Where do you think the possibility of surprise this afternoon is the most right?
speaker1
Jeffrey Lacker
Expects at least one hawkish dissent, maybe three, against the rate cut. Predicts a very hawkish press conference signaling a higher bar for future cuts.
Should the bar be higher?
speaker3
Jeffrey Lacker
Argues the bar should be higher because the labor market is in balance and inflation is elevated at 3%.
Suggests the market and recent disinflation in services indicate the bigger problem is the labor market, not inflation.
speaker3
Jeffrey Lacker
Acknowledges the risk of labor market disruption but points to low initial claims and layoffs as evidence against a significant problem.
Counters that unemployment rate, quits rate, and JOLTS data point to a softening labor market, creating a legitimate debate.
speaker3
Jeffrey Lacker
Describes the current labor market as having less churn, with fewer separations and less hiring, which can be consistent with balance.
Asks how today's Fed decision fits into the global context, especially regarding long-term yields, tariffs, government debt, and worldwide inflation.
speaker1
Jeffrey Lacker
States next year is exceptionally hard to predict due to high uncertainty around US monetary policy, primarily driven by the upcoming transition in Fed leadership.