Fed's Waller plans to support at least a quarter-point rate hike in December
TLT•Federal Reserve Governor Christopher Waller said he would support a 25-basis-point rate hike in December even if inflation cooled as expected, and that a 50-basis-point hike should be considered if core consumer prices rose at least 0.3% from September.
1. December rate decision
Waller said he would support a 25-basis-point increase at the Fed’s December meeting even if October inflation improved. If core consumer prices rose 0.3% or more from September, he said, a 50-basis-point hike should be considered.
2. Inflation remains his focus
Waller said inflation was too high and appeared to be broadening. September core personal consumption expenditures inflation was 3.1% year over year, and more than 70% of core PCE services components rose at least 3%. He said he would watch whether high-tech goods prices tied to the AI buildout and energy costs continued to push prices higher.
3. Market expectations
At Monday’s close, futures reflected about an 85% chance of a rate hike at the December 8-9 meeting, to a target range of 4.00%-4.25%, and a better-than-even chance of another hike as soon as March. Waller said failing to implement expected hikes could cause rates to fall and loosen monetary policy.
