Business & Finance
Fed Governor Waller says September rate decision depends on upcoming inflation figures
Christopher Waller indicated a willingness to hold interest rates steady if inflation slows, though a hotter-than-expected August report could prompt a hike.
The short version
- Federal Reserve Governor Christopher Waller stated he is inclined to keep interest rates unchanged at the upcoming September 15–16 meeting if incoming inflation data continues to moderate.
- Waller noted that borrowing costs remain only slightly restrictive, meaning an acceleration in inflation could lead him to vote for an increase.
- His stance follows comments from Fed Chair Kevin Warsh, who previously suggested further tightening may be needed, causing market expectations for a rate hike to fluctuate.
- The central bank's policy direction will hinge on the government's August inflation report scheduled for release on September 11.
Key facts
- Federal Reserve Governor Christopher Waller said on Thursday that upcoming inflation data will determine whether he votes to raise interest rates or keep them steady at the September 15–16 meeting.[CNBC · Associated Press]
- The government is scheduled to publish August consumer inflation data on September 11 ahead of the Federal Open Market Committee meeting.[CNBC · Associated Press]
- Waller highlighted that a three-month inflation measure favored by the Fed dropped from 4.76% in February to 3.05% recently.[CNBC]
- Fed Chair Kevin Warsh stated the prior week that inflation has not shown sufficient improvement, leading investors to raise the likelihood of a September rate hike.[CNBC · Associated Press]
- Market-implied probabilities for a September interest rate increase dropped to 54.6% following Waller's remarks, according to CME Group data.[CNBC]
What remains uncertain
- Whether the Fed will hike or hold rates at the September meeting remains unresolved, depending directly on the upcoming August inflation readings.[CNBC · Associated Press]