Waller Muddies Interest Rate Hike Outlook Ahead of Key Inflation Report

Federal Reserve Governor Christopher Waller has cast doubt on an interest rate hike later this month, stating that next week's inflation report will largely determine his decision. The government is set to release August inflation figures on September 11, and if they show continued cooling, Waller would be inclined to keep the Fed's benchmark interest rate unchanged.

However, if inflation comes in hot, he would consider a rate hike, as borrowing costs are only slightly restricting consumer and business demand. This uncertainty has sparked a mixed reaction on Wall Street, with stock prices rising and bond yields falling in response to Waller's comments.

Several members of the Fed's rate-setting committee have voiced concerns that price increases are still too high, suggesting a rate hike may be needed. Yet others have said inflation is slowly cooling, and higher borrowing costs aren't necessary.