John Silvia Fed Quotations

If they don't move to a neutral position, the bond market will react negatively. If the Fed sits there and reiterates the same risk on inflation, the bond market is going to look at this and say the Fed is way behind the curve.

What you're seeing is that inflation is rising, ... It's still at a low level, but you know what the trend is. The question to ask is, How much is too much? At what point does the Fed say it's risen enough that we don't want it to go any higher? That's the difficult question to answer.

I would say the consensus is that the Fed goes to a neutral position on inflation.

I suspect that there's a little optimism that the Fed will signal that they are just about done, that they'll change their language from saying 'further policy firming may be' to saying it 'might be' needed.

I think the market may sell off if there's no change in statement, ... It'll still be in the same difficult position, and it'll be disappointed that at this point the Fed is still pursuing goal of raising rates.

I think if you had $70 oil, and the Fed were to continue to raise interest rates to fight inflation, that could cause a problem, ... I think there's a certain breaking point where that the price of energy alone is so high that it changes the psychology of both businesses and consumers. I think $80 would probably break the back.

You can no longer make the argument that there is a lot of excess capacity out there. The bias on inflation is a little bit to the upside and the Fed has to be careful about that.

That's going to be driven by the decision making of the new Fed chairman.

They (the Fed governors) are going to follow the jobs report. They're not going to be proactive. They're going to be reactive to the data,

It's good news for the economy, it's good news for the Fed and it's good news for corporate profits,

That means there is even more slack in the labor market than we had previously thought, giving the Fed even more reason to sit tight for the next several months.

The Fed is going to look at this number and go full-steam ahead with 25-basis-point increases at its next two meetings to keep inflation in check, ... This is a pretty good payroll number for September. The market dodged a bullet with this report.

Inflation gains remain modest but they are gains. This suggests that interest rates will continue to rise as the Fed raises rates at the short end and bond traders discount trend growth and higher inflation at the long end.