Fed Governor Waller says rates could be held if inflation cools
Markets rallied and global bond yields dipped after Christopher Waller urged a September rate hold if inflation continues to cool. Both Waller and New York Fed President John Williams said tariff and war-related energy inflation effects appear temporary.
Markets rallied and global bond yields dipped Thursday after a US Federal Reserve governor advocated holding interest rates steady if inflation continues to cool. “ Give disinflation a chance,” Christopher Waller said, citing “slow but continued progress” toward the Fed’s goal of 2% inflation.
The market odds of a September hike fell to 50% days after Fed Chair Kevin Warsh’s hawkish Jackson Hole speech prompted traders to price in a rate increase.
Both Waller and the New York Fed President John Williams suggested tariffs and war-related energy spikes’ inflationary effects were temporary and fading, but “ there’s no clear signs right now ” whether existing policy will bring inflation down to target, Williams said.