Waller Signals Openness to Holding Interest Rates Steady in September

Federal Reserve Governor Christopher J. Waller signaled that he may support keeping interest rates steady at the central bank's mid-September meeting, provided inflation data continues to show improvement.

In a Reuters event in Washington, D.C., Waller stated that while inflation remains above the Federal Open Market Committee's 2 percent goal, recent data suggest the economy is seeing signs of disinflation. He emphasized the importance of core inflation and noted that three-month core inflation has fallen steadily from 4.76 percent in February to 3.05 percent.

Waller also pointed out that real GDP grew at a 1.8 percent annual rate in the first half of the year, and the unemployment rate fell to 4.1 percent in July, a level he described as historically low. He stated that if there is continued progress toward the 2 percent goal, then he would be willing to support holding the policy rate at its current level.

This stance contrasts with comments made by Fed Chair Kevin Warsh just over a week earlier at Jackson Hole, where Warsh said softer summer inflation readings do not tell him that underlying trends have 'meaningfully improved'. Waller's emphasis on recent disinflation data reflects a broader split among FOMC members.