Lindsay Piazza: Fed Has Room for Rate Hikes, But Aggressive Moves Unlikely

“No, I don't think it did. I think it was another indication that the U.S. economy is still on relatively positive footing. So again, justifying the fact that the Fed does have some room to further firm monetary policy going forward and really shift the focus to tackling elevated inflation, and eventually get us back to that 2% target. Now, we've heard some relatively hawkish commentary from Fed officials, but this is coming years after elevated prices have become ingrained in the economy. So I'm still not overly convinced that this is a Fed willing to do what it takes to get us back to that 2% target.”

“Well, I think the employment picture is going to give the Fed enough space to do the bare minimum of what they've already priced in as we look at the summary of economic projections. Remember, the majority of officials are still anticipating very minimal upside action, just one additional rate increase by the end of the year and a potential additional increase at the start of next year. So we're not talking about a potentially aggressive move higher in the federal funds rate. So a still stable, still positive employment picture allows them to do that, but it doesn't necessarily open up the gates, the floodgates, for a material move higher in monetary policy, or at least that's not what we're seeing as a proposed move. pathway from policy officials at this point.”