An AP News Story
Federal Reserve governor Christopher Waller said Thursday that an inflation report next week will largely determine whether he supports an interest rate hike later this month or not.
The government will release August inflation figures Sept. 11, and if that report shows inflation continues to cool, then Waller said he “would be inclined” to keep the Fed’s benchmark interest rate unchanged.
“But if inflation comes in hot, I would consider a rate hike,” Waller said. Borrowing costs are only “slightly restricting” consumer and business demand, he added, “and it may not take much acceleration in inflation to nudge me into supporting” a rate hike.
Waller is an outspoken member of the Fed’s seven-person governing board, and his remarks suggest that a rate hike later this month is not a done deal. Stock prices rose and bond yields fell in response. Several members of the Fed’s rate-setting committee have voiced concerns that price increases are still too high, suggesting that a rate hike may be needed. Yet others have said inflation is slowly cooling and higher borrowing costs aren’t necessary.
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