finance
Fed Governor Waller Says Elevated CPI Could Prompt Near-Term Policy Tightening
Federal Reserve Governor Christopher Waller said an above-target core inflation reading this week would require the FOMC to consider raising rates soon. He added that several months of cooler data are needed before he would view inflation as clearly declining toward the 2 percent goal.
Jul 13, 12:34 PM·1m read11 sources
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Tightening needeNo further hikes
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Federal Reserve Governor Christopher Waller said Monday that the FOMC will need to consider tightening monetary policy in the near term if this week's core inflation reading comes in elevated. Waller stated that several months of lower inflation readings would be required before he would conclude that price pressures are moving toward the 2 percent target.
He expressed concern that recent price pressures appear to be broadening beyond last year's import tariff increases and the recent jump in energy costs.
Waller said there remains a credible case for inflation to fall back to target with policy at its current setting. An equally plausible case exists that inflation will stay elevated or rise further, he added. The labor market is not as tight as during the post-COVID inflation surge, Waller noted, and inflation expectations remain anchored.
He said he does not want to raise rates prematurely and risk a recession while regarding the job market as stable. The Federal Reserve held interest rates steady at its June 16-17 meeting. Bloomberg reported that Waller's remarks were prepared for an event in New York on Monday.
