Fed Governor Waller sees December hike likely, opens door to possible half-point increase
Waller said a 50-basis-point move should be considered if October inflation stays hot, as markets priced an 85% chance of a quarter-point hike.
- Federal Reserve Governor Christopher Waller said Tuesday he would support a 0.25% interest-rate hike at the Dec. FOMC meeting, emphasizing the importance of policy follow-through to maintain Fed credibility regardless of upcoming inflation readings.
- Waller argued that failing to implement promised hikes would cause Markets to reduce expectations and loosen monetary policy undesirably, adding that higher rates "will be needed, sooner rather than later."
- Following the speech, Markets immediately repriced the probability of a Dec. quarter-point hike from 76.3% to 96.3%, per CME Group's FedWatch Tool, while investors expect the Oct Consumer Price Index to show a 0.3% monthly increase.
- Bitcoin fell 1.3% to $74,080 as traders reacted to higher borrowing cost prospects, while Nasdaq futures declined 0.4% ahead of the Wall Street open and the Labor Statistics inflation report.
- Chicago Fed President Austan Goolsbee cautioned on Monday that the Fed must prevent the economy from running too hot, noting that "because once it gets overheated, it's extremely painful to get rid of that kind of overheating.
91 Articles
91 Articles
A representative of the US Central Bank brings an interest rate step of 50 basis points into play. It is the admission to have underestimated the recent increase in inflation.
Fed Board member Christopher Waller indicated yesterday that the US central bank would have to raise interest rates again in December. If inflation remains this high, he believes it might need to do so by as much as half a percentage point. That is twice as much as previously expected. BNR’s resident economist Han de Jong also considers it likely that interest rates in the US will rise in about a week and a half. ‘But it would surprise me if it …
One of the US central bank bosses is open to a double interest rate hike in December after inflation figures on Tuesday were worse than expected.
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