Fed’s Waller Expects “Significant” Rate Hikes This Month

67
SHARE

Waller pointed out welcome signs that inflation is moderating from its highest peak in more than 40 years.

The personal consumption expenditures price index, which is the Fed’s preferred inflation gauge, soared 6.3% from a year ago in July — 4.6% excluding food and energy, which is still better than the central bank’s 2% long-run goal, and Waller said inflation remains “widespread” even with the recent softening.

He added that inflation seemed to be softening at one point last year, then turned sharply higher to where the consumer price index skyrocketed 9% on a year-over-year basis at one point.

“The consequences of being fooled by a temporary softening in inflation could be even greater now if another misjudgment damages the Fed’s credibility. So, until I see a meaningful and persistent moderation of the rise in core prices, I will support taking significant further steps to tighten monetary policy,” he said.