Waller Says Inflation Report Will Decide Fed's Rate Move

Federal Reserve Governor Christopher Waller said Thursday that the upcoming inflation report will largely determine whether he supports an interest rate hike later this month or not. The government is set to release August inflation figures on September 11, and if it shows inflation continues to cool, Waller would be inclined to keep the Fed's benchmark interest rate unchanged.

However, if inflation comes in hot, Waller would consider a rate hike. Borrowing costs are currently only slightly restricting consumer and business demand, he added, and it may not take much acceleration in inflation to nudge him into supporting a rate hike.

The comments from Waller suggest that a rate hike later this month is not a done deal. Stock prices rose and bond yields fell in response to his remarks. 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.