© Reuters Don’t get too excited! Fed director “sprays cold water”: far from suspending rate hikes
Financial Associated Press News, Shanghai, November 14 (Edited by Huang Junzhi)Federal Reserve Governor Christopher Waller said on Sunday that despite last week’s good consumer price news, “we still have a long way to go” before the central bank stops raising interest rates.
After several consecutive 75 basis point hikes, Fed officials could adjust the rate hike to 50 basis points at their next or next meeting, but Waller warned the time for the Fed to halt rate hikes is not next future.
Waller said: “Interest rates will continue to rise and remain high for a period of time until we see inflation fall to a level close to our target. We still have a long way to go. This will not be in the near end. in a meeting or two”.
The comments echo those made this month by Fed Chairman Jerome Powell and other colleagues who said rate hikes are far from over, but the pace could slow soon. Waller is one of the Fed’s more aggressive policymakers, advocating for tighter policy to ease upward pressures on prices.
The latest data released last week showed that the US CPI rose 7.7% year on year in October, lower than the 7.9% expected and the previous value was 8.2%. The core CPI in the US rose 6.3% year over year in October, which was expected at 6.5% and was previously 6.6%.
“It’s good that we’re finally seeing some evidence that inflation is starting to come down,” Waller said. “We need to see that persist before we really start thinking about curbing.”
Officials predicted in September that rates would hit 4.4% by the end of this year and 4.6% in 2023, implying a 50bp hike in December and a trailing 25bp hike next year. They will update their quarterly forecast next month.
Asked whether rates would rise above 5%, Waller said it would depend on how inflation plays out, while clarifying that the Fed is not backing down.
“A 7.7% CPI rise is still huge,” he said, “it’s not a question of speed anymore, it’s where we end up. Our final point will depend entirely on what happens to inflation.”
