Interest rate hike message from Fed official

Waller, a member of the US Federal Reserve Board (Fed), made assessments of the economic outlook at the US think tank Council on Foreign Relations (CFR).

Saying that almost a year has passed since the Fed’s monetary policy tightening, Waller recalled that interest rates were raised to bring inflation down to the 2 percent target.

Noting that the purpose of interest rate hikes is to support lower inflation by slowing demand and economic activity, Waller said this is reflected in some sectors and in consumer spending.

WALLER INFLATION ALERT

Referring to the improvement on the employment side, Waller said that despite modest economic growth, the strength of the labor market gives the Fed room to focus on reducing inflation.

Waller said that despite continuing his dovish course in December last year, he remains cautious on the inflation outlook and supports continued monetary policy tightening.

Expressing that there is less turbulence ahead given the available data, Waller said: “I am in favor of a 25 basis point increase at the next meeting. We have a long way to go towards our 2 percent inflation target and I look forward to supporting continued monetary tightening.” he said. (AA)