If Covid-19 or “some other factor substantially slows the recovery, hindering the progress toward maximum employment, the FOMC could slow the taper,” Waller said. “But if the economy makes quick progress toward maximum employment or inflation data show no signs of retreating from their currently high readings, the committee may choose to speed up the taper, which would position it to accelerate subsequent steps in tightening monetary policy if necessary.”
No Hurry
Other Fed officials have been in no hurry to speed up the taper. Richmond Fed President Thomas Barkin said Monday the central bank can be “patient” in assessing the taper and “it’s very helpful for us to have a few more months to evaluate.” Minneapolis Fed President Neel Kashkari on Monday said, “We shouldn’t overreact to what is likely going to be a temporary factor.”
St. Louis Fed President James Bullard said this week that the central bank should speed up its reduction of monetary stimulus.
Waller is an appointee of former President Donald Trump and one of the few governors who will remain as the board turns over, with four of seven seats in play. Randal Quarles, the vice chair of supervision, has said he will leave the Fed by the end of the year, and Clarida’s term expires at the end of January.
President Joe Biden is considering Chair Jerome Powell for another four-year term, and has also interviewed Fed Governor Lael Brainard for the top job. There is also an empty seat to fill on the board.
This article was provided by Bloomberg News.