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Federal Reserve Governor Christopher Waller said he’s leaning towards keeping interest rate unchanged in the next meeting
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Waller noted that recent trends “suggest we are finally seeing some signs of disinflation.”
“If this continues in the data due over the next two weeks, I would be inclined to support holding the target for the federal funds rate at its current setting,” Waller said in remarks for a Reuters interview.
“I’m going to paraphrase John Lennon here: Give disinflation a chance. We can wait one meeting,” Waller said. “What’s the cost of waiting one meeting? Hiking 25 basis points, one meeting right now, is not going to bring the CPI down to 2%.”
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However, he noted that he could change course if any new indications emerge between now and the meeting.
“I judge that policy is currently only slightly restricting aggregate demand, and it may not take much acceleration in inflation to nudge me into supporting tighter policy,” Waller said. “If there is evidence that progress toward 2% inflation reversed in August, a small adjustment in our stance would help ensure that it resumes.”
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Market’s expectation for a rate hike at the Sept. 15-16 dropped 15% to 48.4% following his remarks.