Waller Muddies Interest Rate Outlook Ahead of Key Inflation Report

Federal Reserve Governor Christopher Waller says he's in no hurry to raise interest rates later this month. His comments on Thursday suggest that a rate hike is not a done deal, despite some members of the Fed's rate-setting committee calling for higher borrowing costs.

The government will release August inflation figures next week, which will largely determine Waller's stance on interest rates. If the report shows inflation continues to cool, he 'would be inclined' to keep the Fed's benchmark interest rate unchanged. However, if inflation comes in hot, he would consider a rate hike.

This uncertainty has caused stock prices to rise and bond yields to fall. The odds of a rate hike later this month have also fallen from nearly 65% to roughly 50-50, according to CME Fedwatch.