Fed's Waller: We will see how higher long-term rates feed into Fed policy

<p>Waller is refraining from following Logan and saying that higher long-term rates open the door for steady short-term rates, though he doesn't sound too far off in that thinking. It's looking more and more like the Fed will wait in November and see how the economy and markets shape up in December and beyond.</p><ul><li>The real side of the economy is doing well</li><li>If current trends continue, inflation will basically be back to target</li><li>Fed can watch and see what happens on rates</li><li>Clearly, issuance has to have an impact on yields</li><li>When the deficit is 6% with low unemployment, it's unsustainable</li></ul><p>Update: Seeing more of these comments, it sounds more a like a dovish shift.</p><p>Waller compared the rise in Treasury yields to the bank stress events from March. </p><p>

"Now, once again, financial markets are tightening up… They're going to do some of the work for us."</p>

This article was written by Adam Button at www.forexlive.com.