Federal Reserve Governor Christopher Waller delivered a speech in which he expressed growing confidence that current policies are positioned to bring inflation back under control. Waller emphasized that while inflation is still too high, he sees progress in various areas that indicate a need for the Fed to avoid further interest rate hikes.
Waller’s comments come ahead of the Federal Open Market Committee’s upcoming policy meeting, where many expect the committee to maintain the current lending rate. However, the central bank’s efforts against inflation are ongoing, and Waller remains vigilant about the need to keep options open.
Known for his hawkish stance on policy and rates, Waller’s recent speech signaled a shift in tone, as he acknowledged that the pace of the economy appears to be changing. He highlighted areas of moderating activity in retail sales, the labor market, and manufacturing, as well as easing supply chain pressures that initially drove inflation. However, Waller emphasized that monetary policy will play a critical role in bringing inflation down.
Furthermore, Waller referred to the recent consumer price index (CPI) report, which showed flat inflation in October, as a positive sign. However, he also noted that upcoming data, such as the report on inflation measured personal consumption expenditures, will be closely monitored.
In conclusion, Waller’s address reflects cautious optimism about the economy’s trajectory and the potential for inflation to recede. Despite acknowledging signs of moderating activity, he also stressed the importance of ongoing vigilance and the central role of monetary policy in achieving the Fed’s inflation target.