Roger Ferguson: The Fed and the market are now aligned that January is a wait-and-see meeting

Summary

Roger Ferguson, former Fed Vice Chairman, discusses hot November PPI and sticky inflation, arguing the Fed should remain vigilant and is likely to hold in January. He says the economy is resilient with a stronger labor market and solid consumers, but inflation is still too high. He also flags Fed independence as a critical issue amid Supreme Court hearings and a criminal investigation, and comments on the Fed chair nomination race.

• November PPI came in outside expectations, reinforcing sticky inflation concerns.
• Roger Ferguson says inflation is not yet under control and the Fed must stay vigilant.
• He sees a stronger labor market and resilient consumers as good news for the economy.
• He expects the market and Fed to align on a January wait-and-see meeting.
• Ferguson says the last rate cut was a close call but not a disaster.
• Fed independence is under scrutiny, with Supreme Court hearings and a criminal investigation.
• Global central bankers have sent a letter supporting Chair Powell.
• Ferguson says independence concerns may shift the Fed chair nomination race from Kevin Hassett toward another candidate like Kevin Warsh.