Fed’s Hawk: Will not be fooled by one report

Governor Christopher Waller repeated the same Fed’s hawkish stance on Wednesday. Last week, Waller said “we’ve still got a way to go” before the US central bank stops raising interest rates, despite good news last week on consumer prices, jolting risk appetite”.

Waller continues to warn that officials were not close to a pause. He said today that there is still a ways to go on rates.

Waller, who is known as an outspoken hawk in the central bank’s efforts to confront inflation, also said he is now “more comfortable” with smaller rate increases going forward after recent data showed the pace of price increases slowing.

In remarks prepared for delivery at an Arizona economic conference, Waller said it is still unclear how high the Fed will need to raise interest rates, and that he will not make a final decision about what to do at the Fed’s Dec. 13-14 policy meeting until reviewing the rest of the data between now and then.

“I will not be head-faked by one report,” Waller said of consumer price data released last week that saw larger than expected declines in both headline inflation and a narrower but more closely watched index of “core” prices. “We’ve seen this movie before.”

Waller considers most recent reports were a “positive development” that he hoped would be “the beginning of a meaningful and persistent decline in inflation” back to the Fed’s 2% target. After raising rates in atypically large three-quarter point increments at its last four meetings, Waller said that as it stands “the data of the past few weeks have made me more comfortable considering stepping down to a 50-basis-point hike,” in December and possibly to smaller quarter-point increases after that.