Fed Governor Christopher Waller said in a speech that while the slowdown in CPI in October was “welcome news”, “we must be cautious about reading too much into one inflation report”
“I don’t know how sustained this deceleration in consumer prices will be,” he said.And, it’s “way too early to conclude that inflation is headed sustainably down”
Despite raising interest rates from near 0% to 3.75-4.00% in nine months, “policy is barely in restrictive territory today, so more interest rate hikes are needed to get inflation down,” he said.
“The Committee will reach the terminal rate well before inflation reaches 2 percent because of the abundance of evidence that it takes months, and perhaps even longer, for the full effects of a rate increase to work through the economy.”
“Looking toward the FOMC’s December meeting, the data of the past few weeks have made me more comfortable considering stepping down to a 50-basis-point hike. But I won’t be making a judgement about that until I see more data, including the next PCE inflation report and the next jobs report.”
