"Monetary policy acts with a lag. I liken it to a good single malt whiskey or perhaps truly great tequila: It takes time before you feel its full effect. The Fed has to be very careful now to add just the right amount of stimulus to the punchbowl without mixing in the potential to juice up inflation once the effect of the new punch kicks in."
Maybe now the "Fool in the Shower" analogy (too hot…too cold, get it?) will finally (please?) be discarded.
Though Fisher has a long history of shooting from the hip, was a dissenting vote at the last cut, and is often ignored by the markets, today’s selloff in mortgage bonds, (and the resulting increase in mortgage rates) was in part driven by this statement.
In other words, the Fed may still have a hawkish, anti-inflation bent, and could stop the rate cutting party right quick.