Fed Governor Waller Says Next Move Could Be a Rate Hike

United States · Monetary Policy

Key Facts

—The pivot: United States Federal Reserve Governor Christopher Waller said in a Frankfurt speech Friday that the central bank should drop its “easing bias” language because a Federal Reserve rate hike is now just as likely as a cut, the most explicit policy-stance shift from a sitting Federal Open Market Committee member since the Iran war began.

—The speech: Waller delivered the address titled “Policy Risks Have Changed” at the Centre for Central Banking Guest Lecture in Frankfurt, hosted by the European Central Bank, in his first major public appearance since the Federal Reserve Board paused its rate-cutting cycle at the April Federal Open Market Committee meeting.

—The inflation reading: Waller estimated that personal consumption expenditures inflation rose around 3.8 percent over the previous 12 months, the highest in three years and nearly double the Federal Reserve’s 2-percent target, with core inflation excluding food and energy at 3.3 percent year-over-year, the most in two and a half years.