Fed Official: More Rate Hikes Likely, But Flexibility Exists on Timing
Fed Governor Waller says more rate hikes may be needed to hit 2% inflation target, but flexibility on timing remains.
POLICY WIRE — Washington, United States — Federal Reserve Governor Christopher Waller has signaled that additional interest rate increases are likely necessary to bring inflation back to the central bank’s 2% target. However, he emphasized that the pace of these hikes could be adjusted based on incoming economic data.
In a speech delivered at the Central Bank of the Republic of Türkiye İstanbul Economic Forum, Waller stated that if economic indicators align with his expectations, further rate adjustments will be required to accelerate the decline in inflation. He noted that while consecutive meetings may not be necessary, the increases should occur within a reasonable timeframe.
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Waller pointed to several factors contributing to ongoing inflationary pressures, including prolonged tensions in the Middle East, which have raised concerns about oil prices remaining elevated through 2027. He also highlighted the impact of artificial intelligence development on high-tech consumer goods and the potential for new trade disputes to further inflate costs. Despite these challenges, he expressed confidence in the economy’s resilience and indicated that monetary policy will remain focused on controlling inflation in the near term.
Reporting by Policy-Wire (PW)
