Fed's Waller says higher rates possibly needed in 'near term'

He spoke amid the resumption of military conflict between the U.S. and Iran, which could push oil prices higher again and remove one of the factors that had been seemingly on the brink of helping lower costs.

"There is still a credible case for inflation to begin to fall back to our 2% goal with policy at its current setting. But I am concerned about the equally plausible case that data in the coming weeks will show that inflation will remain at its elevated level or even trend higher, requiring tighter monetary policy in the near term," Waller said.

In particular, he said he is worried that recent inflation reports have shown price pressures seeming to broaden throughout the economy, beyond the influence of last year's import tariff increases or the recent jump in energy costs and potentially reflecting more systemic inflation that would require tighter monetary policy. For core services, which account for 75% of core prices, nearly 70% of its categories have 3-month and 12-month inflation over 3%, he said.