Gov Waller: Potential For More Policy Tightening To Be Needed

Gov. Waller (voter) returned to his more hawkish ways in prepared remarks today. The wait and see approach echoes his previous remarks from Oct 11 but there appears more discomfort on the rate of underlying inflation again, having uncharacteristically said on Oct 11 (the day before the latest CPI report) that the Fed is finally getting very good inflation we wanted.

• “We can wait, watch and see how the economy evolves before making definitive moves on the path of the policy rate”.
• “Should the real side of the economy soften, we will have more room to wait on any further rate hikes and let the recent run-up on longer-term rates do some of our work. But if the real economy continues showing underlying strength and inflation appears to stabilize or reaccelerate, more policy tightening is likely needed despite the recent run up in longer term rates.”
• "Similarly, supercore inflation […] has continued at a robust monthly rate of about 0.5 percent the past two months. Again, this reading is not at a level needed to make progress toward our goal and we need to watch and see if these numbers indicate that inflation is reaccelerating."