Comments from the Dallas Fed President on CNBC:
- Base case is to see a temporary surge in prices this year so that inflation will settle down next year
- Says his forecasts has improved meaningfully
- Expects 6.5% growth and 4.5% unemployment this year
- He will advocate for scaling back stimulus after he sees strong outcomes, not just strong forecasts
- Says he expects Fed to start raising rates in 2022
- Says his forecast for removing accommodation is more aggressive than the median
- First step to withdrawing accommodation is to reduce asset purchases
- Says he would expect the 10-year yield to continue rising from here to 1.75%-2.00%
- Still believes inflation will prove somewhat temporary and will settle down next year
I appreciate the humility in his comments regarding inflation. He also takes out some of the mystery of the dots as there are only 4 of them showing hikes in 2022.
