Waller: more rate hikes likely, but not at every meeting
A Fed governor says further hikes are probably needed if data match his expectations, and timing is flexible.
Federal Reserve Governor Christopher Waller said on Thursday that he expects the Fed will need to raise interest rates further if the economic data come in as he expects. He also said the hikes "do not need to come at consecutive meetings."
What he said
In a speech at the Istanbul Economic Forum, Waller said: "If the economic data continue to come in as expected, I anticipate additional hikes to support a timelier return of inflation to our 2 percent goal." He added that there is "some flexibility about when those hikes will occur," but that they should be in place in an acceptable period of time.
He said the Fed's September decision to raise its policy rate 25 basis points, to 3.75% to 4%, came after a build-up of evidence over several months. He pointed to three forces: the conflict in the Middle East keeping energy prices high, an AI buildout pushing up high-tech prices, and trade conflicts that could bring new tariffs.
Why markets care
Higher interest rates raise borrowing costs for companies and households. The Motley Fool noted that rising rates could become a headwind for technology companies, which have been borrowing more. On Thursday, Treasury yields jumped in the morning and fell back in the afternoon, according to the Associated Press.
What is next
The Fed's next policy meeting is October 27-28. Waller's comments are one governor's view, not a committee decision.