Fed Governor Cites August Inflation Data as Key to September Rate Hike Decision
US Federal Reserve Governor Christopher Waller emphasized that the upcoming August inflation data will play a crucial role in determining the central bank's stance on interest rates at its September meeting. The FOMC is scheduled to convene on September 15 and 16, and Waller said his decision on monetary policy will be heavily influenced by the August inflation numbers.
In July, the three-month core inflation rate stood at 3.05%, down from 4.76% in February. Waller considered this decline a 'considerable improvement' and noted that energy prices remain significantly higher than at the beginning of 2026. However, he also pointed out potential risks that could push inflation higher, including rising energy costs and possible tariff increases.
Waller stated that if inflation continues to move towards the Fed's 2% target, he would support keeping interest rates unchanged. On the other hand, if August's data shows a resurgence of high inflation, he would consider raising rates. The governor acknowledged that current policy is only slightly restraining aggregate demand and warned that renewed acceleration in inflation could prompt tighter monetary policy.