George Keeps To More Hawkish Parts Of Recent Commentary

• KC Fed’s George (’22 voter) keeps to the hawkish parts of recent comments from Aug 18 but drops the relatively more dovish parts such as that the Fed has done a lot and must be mindful that policy acts with a lag.
• She also includes more explicit mention that rates could exceed 4%, further supporting the higher for longer view.
• Nothing new on wanting to raise rates until evidence inflation coming down, and it's in line with other recent Fedspeak, but continues to be a loose definition that hopefully gets more clarity with Powell speaking tomorrow.
• 2Y Tsys initially cheapened 1bp before retracing but it hit concurrently with ECB meeting accounts.

Bloomberg headlines

*GEORGE: SHOULD RAISE RATES UNTIL EVIDENCE INFLATION COMING DOWN

*GEORGE: FED RATES CURRENTLY NOT AT A RESTRICTIVE SETTING, WE HAVE MORE ROOM TO GO IN RAISING RATES
*GEORGE: IMPORTANT FED IS CLEAR ABOUT DESTINATION WE’RE HEADING

*GEORGE: NOT OUT OF QUESTION THAT FED WOULD HOLD RATES ABOVE 4%

*FED’S GEORGE SAYS WE WANT FINANCIAL CONDITIONS TO TIGHTEN