Waller Keeps September Rate Hike Decision Open Amid Soaring Energy Prices

Federal Reserve Governor Christopher Waller has signaled that he is willing to give disinflation more time, but another rate hike at the September FOMC meeting remains possible if August inflation comes in stronger than expected.

In a Reuters NEXT Newsmaker interview, Waller noted that recent inflation data has shown encouraging progress toward the Fed's 2% target. If this trend continues, he would support leaving rates unchanged when policymakers meet on Sept. 15-16.

The comments come as markets remain highly sensitive to inflation and Fed policy. Waller pointed out that three-month core inflation fell to 3.05% through July from 4.76% in February, a trend he described as encouraging. However, he also noted that monetary policy is currently only slightly restrictive, meaning the Fed still has room to act if inflation begins accelerating again.

A hotter August inflation reading could justify another small rate increase, Waller said. This stance follows a more hawkish debate inside the central bank, where officials had discussed further rate hikes if inflation stayed high.