Waller Backs Steady Rates at September Meeting Amid Signs of Disinflation

Federal Reserve Governor Christopher Waller expressed his preference to keep interest rates steady at the central bank's September meeting, provided there are no surprises in upcoming inflation data. In a Reuters interview, he stated that recent trends suggest 'we are finally seeing some signs of disinflation.'

Waller noted that tariff impacts have been muted and higher energy prices haven't had a substantial impact on other parts of the economy, despite headline inflation being at 3.7% and core at 3.3% for July.

The policymaker emphasized that the three-month inflation rate as measured by the Fed's preferred gauge has slipped from 4.76% in February to 3.05% currently, which he believes is a 'considerable improvement.'

However, Waller also cautioned that if there are any indications between now and the meeting, he could change course and support tighter policy. He added that market-implied odds for a rate hike at the September meeting dropped sharply following his comments.