Waller Keeps Rate Hike Option Open Amid Disinflation Signs

Federal Reserve Governor Christopher Waller expressed his inclination to remain patient on interest rates in a recent speech. He emphasized that his decision will be heavily influenced by the upcoming August inflation data, which is due next week.

Inflation remains above the Federal Open Market Committee's 2% goal, but recent data suggest some signs of disinflation. Waller noted that if there is continued progress toward the 2% goal, he would support holding the policy rate at its current level.

If inflation comes in hot, however, Waller stated that he would consider a rate hike to ensure it resumes. He also expressed concern about raising rates into a period of falling inflation and suggested that the current monetary policy settings may be enough to return inflation to the 2% target.