Fed’s Waller Supports 50 bps Hikes At Next FOMC meetings

Member of Fed Board of Governors, Chris Waller said on Monday that he supports hiking interest rates by another 50 bps at the next several FOMC meetings and that the policy rate should be above neutral by the end of the year to reduce demand, reported Reuters.

Waller also said he is not taking 50 bps rate hikes off of the table until inflation could be kept lower closer to the Fed’s 2.0% target.

According to Waller, inflation is currently and stubbornly high, he is prepared to do more. Reductions in the size of the Fed’s balance sheet are equivalent to a couple of additional 25 bps rate hikes, he noted.

Additional Quotes:

I don’t know how soon supply constraints will ease.

Core inflation is not coming down enough to the Fed’s 2% goal anytime soon.

The economy continues to power along at a healthy pace.

I don’t expect the Q1 drop in output to be repeated.

Inflation remains alarmingly high.

I am optimistic that the strong US labor market can handle higher rates without a significant increase in unemployment.

Longer-run inflation expectations have moved up to a level consistent with underlying inflation a little above 2%.