Waller: Recent Moves In 10Y Yields An Earthquake

Gov. Waller’s (voter) prepared remarks steered clear of policy-related content, but the broader presentation and audience Q&A had some notable lines. He typically lies at the hawkish end of the FOMC.

• The labor market is coming into better balance.
• Everything was booming in Q3 GDP and the Fed is watching that closely.
• The near 100bp increase in 10Y Treasury yields over the short period of time is an “earthquake” in central banking terms (recall he said on Oct 18 that the rise in long rates can accomplish tightening).
• If rate hikes cause instability, the Fed has other tools (the context was unclear here as the live feed was down but we suspect this is related to the emergency lines opened up earlier this year amidst regional banking woes).