Fed’s Waller: Central Bank’s Next Rate Move Depends on Upcoming Inflation Report
Federal Reserve Governor Christopher Waller said Thursday that an inflation report coming out next week will largely determine whether or not he will support an interest rate hike later this month.
The government will release August inflation figures Sept. 11, the Boston Herald reported, and if that report shows inflation continues to cool, Waller said he would be willing to keep the Fed’s benchmark interest rate unchanged.
“But if inflation comes in hot, I would consider a rate hike,” Waller said. Borrowing costs are only “slightly restricting” consumer and business demand, Waller added, “and it may not take much acceleration in inflation to nudge me into supporting” a rate hike.
Waller has been an outspoken member of the Fed’s seven-person governing board, the Globe reported, and his remarks add more weight to the upcoming inflation data.
Members Voice Concerns
The Globe reported that several members of the Fed’s rate-setting committee have voiced concerns that price increases are still too high, suggesting a rate hike may be needed. Still others have suggested inflation is slowly cooling and higher borrowing costs are not needed.
Last week, Fed Chair Kevin Warsh said that inflation hasn’t shown sufficient improvement and the Fed might have “more work to do,” which the Globe said is a sign he is weighing a rate increase at the Fed’s next meeting Sept. 15-16.
The Globe said that Wall Street investors sharply increased their bets on a rate hike at the September meeting after Warsh’s speech.
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