Federal Reserve Governor Christopher Waller is anticipating an interest rate cut in December, leaning towards supporting a cut at the December meeting based on current economic data and forecasts indicating a downward path to 2% inflation. However, Waller expressed concern about recent trends showing progress on inflation may be stalling. The Fed’s preferred inflation indicator, the personal consumption expenditures price index, showed headline inflation at 2.3% annually and core prices at 2.8%, above the 2% target.
Waller likened the struggle with inflation to an MMA fighter trying to get inflation in a chokehold, with the goal proving elusive. Despite this, Waller believes that inflation will eventually be subdued. Markets are expecting the Fed to cut rates by another quarter percentage point in December, following previous cuts in September and November.
Waller stated that he will closely monitor incoming employment and inflation data, with reports on job openings and nonfarm payrolls forthcoming. Despite slowing progress on inflation, Waller is inclined to continue easing monetary policy due to the overall health of the economy. He believes that with evidence indicating policy remains restrictive, further cuts will help to alleviate this pressure. Waller’s cautious optimism about the economy and his focus on data-driven decision-making suggest a willingness to act as necessary to support economic growth and stability.
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