Federal Reserve Governor Christopher Waller signaled on Wednesday that the central bank has sufficient room to delay rate hikes as they evaluate incoming economic information. In his address for a London address, Waller asserted, "I am of the view that we can pause, observe and discover how the economy develops prior to deciding upon definite steps for the policy rate."
Governor Christopher Waller of the Federal Reserve declared on Wednesday that the central bank can take its time before raising interest rates while it observes the impact of measures taken to lower inflation. During the upcoming meeting two weeks from now, Waller declared that he needed to carefully assess various reports to decide if their efforts are successful in subduing demand and managing inflation, or if the economy exhibits strength and causes prices to rise. He said that the jury was still out on the matter. Waller's statement preceded Fed Chair Jerome Powell's policy speech, which is scheduled to be held in New York tomorrow. Other Federal Reserve members have pointed out that the increasing rate of the 10-year Treasury is an indication that financial conditions are getting harder, suggesting that additional rate hikes may be unnecessary. Waller corroborated this, noting that the last few months have seen rising inflation as reported by consumer price index and personal consumption expenditures price index, both showing 3.1% and 2% core inflation respectively.
Officials are being cautious when it comes to assessing changes in inflation which have caused difficulties in the past. Most Federal Reserve workers don't anticipate any rate cuts occurring, and many are of the mind that the current rate hike cycle is reaching its conclusion. Waller, who has tended to favor higher rates and stricter regulations, suggested that there may be a pause in rate hikes for the near term, but if the economy continues its strength and inflation stabilizes or increases, more tightening will be necessary. The labor market has been strong and spending has surpassed inflation expectations, so Waller said he'll be keeping an eye on nonresidential investments, construction spending, and GDP growth.
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