Fed's Waller Signals Possible Rate Pause if Inflation Cools
Fed Governor Waller says he is open to holding rates steady in September if inflation data shows continued progress toward the 2% target.
Federal Reserve Governor Christopher Waller indicated on Thursday that he is prepared to support keeping the central bank's policy rate unchanged at its upcoming September meeting, provided upcoming data confirms that inflation is cooling.
Speaking at a Washington event, Waller said his decision would be heavily influenced by August inflation figures. "If there is continued progress toward our 2% goal, then I am willing to support holding the policy rate at its current level," he said.
However, Waller cautioned that a rate increase remains a distinct possibility. He stated that if inflation comes in hot, he would consider a hike at the September 15-16 meeting. He noted that the current policy rate range of 3.50%-3.75% is only slightly restrictive, adding that "it may not take much acceleration in inflation to nudge me into supporting tighter policy."
Waller acknowledged that inflation remains "meaningfully above" the target but described progress as "slow but continued." His remarks come amid market expectations for a quarter-point hike this month, with several officials signaling concern over persistent price pressures.
He also downplayed certain drivers of recent inflation, suggesting that elevated energy prices and tariffs are not likely to be significant ongoing pressures. However, he flagged upside risks, including renewed energy price gains and potential pressures on technology goods prices from the AI buildout.