Waller Hints at Rate Decision Hinging on Upcoming Inflation Report

Federal Reserve Governor Christopher Waller said that an upcoming inflation report will largely determine whether he supports an interest rate hike later this month. The government is set to release August inflation figures on September 11, and if they show continued cooling, Waller would likely keep the Fed's benchmark interest rate unchanged.

However, if the report shows a surge in inflation, Waller would consider a rate hike. He stated that borrowing costs are only 'slightly restricting' consumer and business demand, and it may not take much acceleration in inflation to prompt him to support a rate increase.

The Fed's next meeting is scheduled for September 15-16, and the outcome will be closely watched by investors. Several members of the Fed's rate-setting committee have voiced concerns that price increases are still too high, suggesting that a rate hike may be needed. On the other hand, some members believe inflation is slowly cooling, making higher borrowing costs unnecessary.

Fed Chair Kevin Warsh said last week at the annual economic symposium in Jackson Hole, Wyoming, that inflation had not shown sufficient improvement and that the central bank might have 'more work to do', a sign he is weighing a rate increase. This has led investors to sharply increase their bets on a rate hike this month.