Fed's Waller Says Higher Rates Possibly Needed in 'Near Term'
Waller said core inflation may stay elevated because of artificial intelligence, 2025 tariffs and energy costs, while markets see a 39% chance of a hike.
- On Monday, Federal Reserve Governor Christopher Waller said the U.S. central bank may need to raise interest rates in the near term if inflation continues above the Fed's 2% target, characterizing monetary policy as at a crossroads.
- Recent inflation reports show price pressures broadening throughout the economy beyond tariffs and energy costs, potentially signaling systemic inflation; another round of U.S.-Iran military conflict has pushed energy prices higher.
- Nearly 70% of core services categories—accounting for 75% of core prices—show 3-month and 12-month inflation over 3%, while the core personal consumption expenditures index hit 3.4% year-over-year through May.
- Financial markets priced in a 45% chance of a July rate hike as Waller spoke, up from 35% earlier, with late July meeting odds at 39%; Waller said the Fed should not be complacent if Tuesday's inflation data disappoints.
- Waller noted an equally plausible scenario where inflation stays elevated, requiring near-term tightening, while acknowledging the labor market is stable and inflation expectations remain anchored—advantages the FOMC should not squander.
17 Articles
17 Articles
The words of Fed Director Waller suggest that the central bank's call for higher interest rates is growing.
The future gold contracts closed sharply on Monday (13), expanding the losses seen earlier in the midst of the more "hawkish" statements by the director of the Federal Reserve (Fed, the American central bank) Christopher Waller. The prospect of higher interest rates in the United States tends to make the application of precious metal less attractive to investors, since it does not offer any income. At the closure of Comex, the metal division of …
Fed's Waller says higher rates possibly needed in 'near term'
The U.S. central bank may need to raise interest rates "in the near term" if coming data show inflation continuing well above the 2% target, Federal Reserve Governor Christopher Waller said on Monday, in remarks that characterized monetary policy as being at a "crossroads."
Christopher Waller felt that the central bank should be prepared to raise its short-term interest rates if inflation continued to rise.
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