Fed governor Waller muddies outlook on possible rate hike later this month
Summary
Federal Reserve governor Christopher Waller said the decision to raise interest rates later this month depends on the August inflation report. If inflation keeps cooling, Waller likely won’t support a rate hike, but if inflation rises, he may back increasing rates to slow down price growth.Key Facts
- The August inflation report will be released on September 11 and is key to deciding if interest rates rise.
- Waller said borrowing costs are only slightly limiting spending by consumers and businesses.
- He is open to raising rates if inflation increases unexpectedly.
- Other Fed members have mixed views: some want hikes due to high inflation, others see inflation cooling.
- Fed Chair Kevin Warsh noted inflation hasn’t improved enough and more action might be needed.
- After Waller’s comments, the probability of a rate hike in September dropped from 65% to about 50%.
- Inflation has slowed slightly in recent months, nearing the Fed’s 2% target.
- Vice President JD Vance said the Trump administration wants the Fed to lower interest rates, not raise or keep them steady.
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