Discussion
Roger Ferguson is one of the Fed’s key “unofficial” mouthpieces (in addition to Dudley, Clarida, Quarles, and now Jim Bullard), and this morning on CNBC he confirmed that at present Powell is Burns.
At first blush Ferguson appears to push back against the narrative the Fed is likely to cut in March, but then later in the interview - in response to a question about what it would take for the Fed to cut in 1H24 - he says, with gusto, that soft consumer spending and/or banking stress could prompt 1H24 cuts.
The fact 1H24 cuts are being debated before the consumer even officially slows is exhibit A of where Powell’s head is currently at.
Again, there is plenty of daylight between now and March. If FCI does what appears likely on the back of an equity market parabola into the January FOMC meeting, no matter how Burns-like Powell is it is unlikely he will guide to rate cuts starting in 1H24. But right here and now, Powell is Burns full stop. He believes inflation is in the bag and now it’s time to consider the labor side of the mandate.