Fed’s Waller: If tariffs are closer to 10%, then economy is good shape for 2H

• Markets are watching fiscal policy and have concerns.
• Markets are looking for more fiscal discipline.
• Fed won’t buy bonds in primary auctions.
• Hard data shows economy doing quite well, scant sign of tariff impact so far.
• If tariffs are closer to 10%, then economy is good shape for 2H.
• If tariffs settle down, Fed could be in position to cut in later part of the year.
• Much more optimistic now relative to last month on tariffs.
• Very hopeful the current path of administration is a good one.
• Firms are pausing but not cancelling plans.
• Continue to believe tariffs will be a one time price increase.
• Standard Fed playbook is to look through one time price impact.

This article was written by Giuseppe Dellamotta at www.forexlive.com.