Fed’s Waller: No Plans to Raise Interest to Finance Deficit

The United States Federal Reserve remains a long way from raising interest rates, said the Fed Governor Christopher Waller, in his first speech on Monday.

Waller, who joined the Fed’s board of governors in December, said that the central bank does not plan to increase interest rates or the expand asset purchases to help finance the rising deficit of the federal government.

“Because of the large fiscal deficits and rising federal debt, a narrative has emerged that the Federal Reserve will succumb to pressures to keep interest rates low to help service the debt and to maintain asset purchases to help finance the federal government.”

“My goal today is to definitively put that narrative to rest. It is simply wrong. Monetary policy has not and will not be conducted for these purposes.”

“There are sizable costs if cooperation turns into fiscal control.”