Fed Governor Waller considers a 50-basis-point rate hike — CNBC

Federal Reserve Board Governor Christopher Waller said during a speech in London that he is leaning toward an interest rate hike in December. According to him, if October inflation data come in above forecasts, he would consider it necessary to consider raising the rate by 50 basis points.

Conditions for a larger move

Waller noted that he would support a 25-basis-point rate hike even if inflation figures were softer than expected. At the same time, in the event of stronger data, he would advocate more decisive action. In his view, limiting the increase to only 25 basis points in such a case could jeopardize the central bank's credibility.

As CNBC reports, Waller stressed that markets have already priced in expectations of further monetary policy tightening. He considers it important for the Fed to implement the promised rate increases within a reasonable timeframe, although this does not necessarily have to happen at every consecutive meeting.

More current news is available on the UA.News Telegram channel Telegram.

Fed decision in December

In October, the Federal Open Market Committee left the rate unchanged, explaining that it needed to gather more information to determine the further course of policy aimed at reducing inflation. The decision was not unanimous: Federal Reserve Board Governor Lisa Cook and Cleveland Federal Reserve Bank President Beth Hammack dissented.

The next Fed meeting is scheduled for December 8–9. Before it, the U.S. Bureau of Labor Statistics is due to release October consumer price index data. According to CME Group FedWatch, markets put the probability of a 25-basis-point hike in December at more than 80%, without pricing in a 50-basis-point increase.

Waller described the U.S. economy as growing at a healthy pace and the labor market as resilient, though not particularly dynamic because of low rates of both hiring and layoffs.