5 hrs ago
Waller Signals Fed Patience, Keeps Rate Hike Option Open
Christopher Waller is a senior official at the U.S. central bank.
He said the bank should wait a little longer to see whether rising prices are slowing down.
New inflation information expected next week will help guide his decision.
If inflation keeps improving, he may support leaving interest rates where they are.
If inflation suddenly gets worse, he may support raising rates.
Higher rates can help slow price increases but can also weaken the economy.
Waller said current policy is already slightly slowing economic activity.
Investors reacted positively to his cautious comments, with stocks rising and bond yields falling.
Federal Reserve Governor Christopher Waller said he favors waiting for more evidence that inflation is easing.
Waller said August inflation data, due next week, will heavily influence his decision.
He would support keeping rates unchanged if progress toward the 2% inflation goal continues.
Waller said a hotter inflation reading could lead him to support a rate hike.
Stocks rose and bond yields fell after his comments, while the dollar slipped.
- Who
- Federal Reserve Governor Christopher Waller.
- What
- Waller signaled patience on interest rates while keeping a rate hike under consideration if inflation accelerates.
- Where
- At a Reuters NEXT Newsmaker event in Washington.
- When
- Thursday; August inflation data is due next week.
- Why
- Waller wants to determine whether disinflation is continuing before changing policy, while ensuring inflation returns toward the Federal Open Market Committee’s 2% goal.
Wait for More Inflation Evidence
Raise Rates if Inflation Reaccelerates
Immediate rate policy
Wait for More Inflation Evidence
Waller said he is willing to support holding the policy rate at its current level if progress toward the 2% inflation goal continues.
Raise Rates if Inflation Reaccelerates
Waller said he would consider a rate hike if inflation comes in hot or if progress toward 2% reverses.
Risk assessment
Wait for More Inflation Evidence
Waiting could show whether current policy settings are sufficient to bring inflation back to target and avoid raising rates while inflation is falling.
Raise Rates if Inflation Reaccelerates
A small policy adjustment could help ensure that progress toward the 2% goal resumes if price pressures accelerate.
Key facts
- Speaker
- Federal Reserve Governor Christopher Waller
- Policy stance
- Waller is inclined to wait one meeting for more inflation data.
- Inflation goal
- The Federal Open Market Committee’s target is 2% inflation.
- Possible hike
- Waller said he would consider a rate hike if inflation comes in hot or progress toward 2% reverses.
- Upcoming data
- August inflation data is expected next week.
- Market reaction
- Stocks rose, bond yields fell, and the dollar slipped after Waller’s comments.
- Other market moves
- Bitcoin climbed above $80,000, while spot gold rose 2.5% to $4,490.21 an ounce.
Quotes
Christopher Waller
Federal Reserve governor discussing the outlook for US interest-rate policy
““If there is continued progress toward our 2% goal, then I am willing to support holding the policy rate at its current level. But if inflation comes in hot, I would consider a rate hike.””
livemint.com
““While inflation remains meaningfully above the Federal Open Market Committee’s 2% goal, recent data suggest we are finally seeing some signs of disinflation.””
livemint.com
Sources
Related news
Waller Keeps September Fed Hold Alive as CPI Looms
U.S. Treasury Yields Fall as Waller Dents Rate Hike Bets
Inflation Report Could Determine September Federal Reserve Rate Hike
Fed official warns rate hike if inflation progress stalls
Warsh Signals Possible Rate Hikes as Inflation Stays Above Target
Wall Street hits record high on cooling US inflation
Wall Street Rallies as Waller Eases Rate Hike Fears
Pakistan Raises $3 Billion Amid Hopes and Economic Risks
GIFT Nifty Signals Firm Indian Opening as Crude Prices Ease
Dow Jones Gains 300 Points as Dip Buyers Return
