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MNI BRIEF: Fed's Waller Backs 75BP Hike This Month, 50 in Sept

(MNI) OTTAWA
(MNI)

Federal Reserve Governor Christopher Waller on Thursday backed another 75 basis point rate increase this month followed by 50bps in September, saying it's essential to front-load tightening to prevent the economy from being overwhelmed by persistent inflation.

After those moves the Fed can “debate whether we go back to 25," he said on a NABE webinar. “We need to move to a much more restrictive setting, and we need to do so as quickly as possible.” His comments mesh with what ex-officials told MNI about future moves. (See: Fed Sees 75bp Hike As New Baseline- Ex-Officials)

“Everybody understands that we’ve got to get inflation under control” rather than worry about the stop-and-start tightening cycle seen in the 1970s, he said. The Fed can't allow expectations to become un-anchored as opposed to worry about over tightening, he said. “If we don’t get inflation under control, inflation on its own can put us in a really bad” spot, Waller said.

MNI Ottawa Bureau | +1 613-314-9647 | greg.quinn@marketnews.com
MNI Ottawa Bureau | +1 613-314-9647 | greg.quinn@marketnews.com

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