WALLER: MORE FED HIKES NEEDED, BUT NOT AT EVERY MEETING
Federal Reserve Governor Christopher Waller said he anticipates additional rate hikes to support a more timely return of inflation to the Fed’s 2% target, while emphasizing that the timing of those increases can remain flexible. He said rate hikes do not need to come at consecutive meetings, but should be implemented within an acceptable period.
Investors currently see the Fed keeping rates steady at the October 27–28 meeting, with expectations for another rate increase in December if incoming economic data supports further policy adjustment.
Waller pointed to strengthening economic activity in the second half of the year, while also highlighting higher energy prices and the AI buildout driving up high-tech consumer prices as factors contributing to persistent inflation pressures.
Waller said the labor market is stable and inflation is too high, adding that policy will remain focused on the inflation side of the Fed’s mandate in the near term.
The September economic projections showed that 16 of the 18 officials who submitted rate projections expected at least one more hike during the two remaining meetings of the year, while four expected two additional hikes.
For market participants, the key factors remain in the 3.75%–4.00% policy rate range, the October 27–28 Fed meeting, the 2% inflation target, US inflation data, labor-market conditions and expectations for further rate increases, which may provide further context for the near-term direction of the US Dollar.
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