Christopher Waller, Governor at the Federal Reserve, stated in a Tuesday interview with CNBC that the recent batch of good data provides the central bank a window to deliberate policy decisions. Waller shared that he was delighted with the outcomes of the reports on prices, but mentioned that it also implies the Fed can keep its interest rates elevated until inflation is effectively contained.
Federal Reserve Governor Christopher Waller on Tuesday declared that the recent data indicating a robust economy enables the central bank to take a measured approach in determining whether additional rate hikes are necessary to control inflation. Speaking to CNBC's Steve Liesman on "Squawk Box," Waller exclaimed, “We got a hell of a good week of data last week, and the key out of it is that it’s going to allow us to proceed carefully. We can just sit there, wait for the data, see if things continue.” The data he was referencing included Friday's nonfarm payrolls report, showing job growth of 187,000 in August with average hourly earnings rising just 0.2%, lower than forecast. Additionally, the Federal Reserve's preferred inflation gauge rose 0.2% in July, and job openings dropped to their lowest level since March 2021. Waller, known for his hawkish monetary policy disposition, commented on these facts and remarked, “The key now is to see whether this low inflation is a trend or if it was just an outlier or a fluke.” Market evidence is strongly pointing to the Federal Open Market Committee presiding over a rate hold at its September 19-20 meeting. Still, there is a 43.5% probability of an increase at the October-November session, based on CME Group data. Goldman Sachs has offered the opinion that the Fed is done for the time being. Waller observed, “I don’t think one more hike would necessarily throw the economy into recession if we did feel that we needed to do one. It’s not obvious that we’re in real danger of doing a lot of damage to the job market, even if we raise rates one more time.” His sentiments echo recent comments from Fed Chair Jerome Powell, who acknowledged that inflation is too high and the central bank must proceed with caution.
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