Fed's Waller Wants Two More Rate Hikes This Year

The Federal Reserve should raise interest rates twice more this year to bring U.S. inflation back down to the central bank’s 2% goal, Fed Governor Chris Waller said Thursday. (See this link for more details).

• “I see two more 25-basis-point hikes in the target range over the four remaining meetings this year as necessary to keep inflation moving toward our target,” Waller said in prepared remarks to the Money Marketeers of New York University.
• “Furthermore, I believe we will need to keep policy restrictive for some time in order to have inflation settle down around our 2% target. Waller said he supported the decision to hold rates steady at 5-5.25% in June in large part because of uncertainty about the possible credit market effects from the March banking turmoil, something he no longer sees as a major concern.
• Waller said the decline in U.S. consumer prices to 3% in the year to June, the lowest level since March 2021, is welcome news. But one data point does not make a trend. Inflation briefly slowed in the summer of 2021 before getting much worse, so I am going to need to see this improvement sustained before I am confident that inflation has decelerated,” he said.