Fed's Waller had 'a strong interview' but the market isn't buying it

Fed's Waller's strong interview hasn't convinced the market, which remains skeptical. Despite expectations of a 60 bps rate cut in the coming year, persistent inflation and high spending continue to influence market feelings. The fall in oil prices to five-year lows may support the case for cuts, yet recent CPI reports suggest any easing effects could be statistical noise due to data collection issues during a government shutdown. Should Waller become the Fed chair, there might be a decrease in long-term yields, boosting confidence in controlling inflation. However, disappointment might arise in equity markets if overly dovish candidates like Warsh or Hassett are not selected. As the timeline for the chair announcement approaches, market reactions may remain cautious given Trump’s emphasis on low rates.