Waller says the Fed may wait for the data to decide whether to raise interest rates

In a sign that the Federal Reserve won’t raise interest rates at its next meeting but could easily do so later, Fed Director Christopher Waller said Wednesday that he wants to “wait and watch and see.” it strengthens or weakens in response to the interest rate increases already made.

“If the real side of the economy weakens, we will have more room to wait for further rate hikes and let the recent increase in long-term rates be part of our work,” said Waller, one of the toughest policymakers maker. inflation, in comments prepared for presentation at a seminar in London.

“But if the real economy continues to show underlying strength and inflation appears to stabilize or reaccelerate, further monetary policy tightening will likely be necessary, despite the recent rise in long-term rates.”

The Fed aggressively raised its benchmark interest rate last year to address inflation that hit 40-year highs, and this year there has been clear progress in reducing price pressure even as the market of labor remains strong, Waller said in his speech.

“The data over the past few months has been extremely positive for both the FOMC goals of maximum employment and price stability,” he said. But this cannot continue, she said.

If the economy slows, “we can keep the monetary policy rate stable and let the economy evolve the way we want,” he said.

However, if demand and economic activity continue at their recent pace, this could put upward pressure on inflation and “further interest rate interventions will be required to ensure that inflation returns to the target level and that expectations remain anchored.”

Source: Terra

Rose

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