Fed’s Waller Signals Further Rate Hikes with Flexible Pace Amid Persistent Inflation
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- Fed’s Waller expects more rate hikes due to high inflation.
- Hikes can be flexible and not consecutive.
- Economy strengthening in H2 2026; labor market “solid and stable”.
Federal Reserve Governor Christopher Waller stated that further interest rate hikes will likely be required to address persistently high inflation, which he noted has been above target for 5-1/2 years. Speaking at the Central Bank of the Republic of Türkiye (TCMB) Istanbul Economic Forum on Thursday, Waller highlighted that officials possess flexibility on the timing of these adjustments, indicating that tightening does not need to occur at consecutive policy meetings. He cited factors such as the AI buildout and ongoing energy shock as persistent inflationary forces, expressing concern that prolonged high inflation could jeopardize inflation expectations. Waller also noted evidence of the economy strengthening in the second half of 2026 and described the September labor market as “solid and stable,” downplaying recent job creation weakness. He anticipates additional hikes if incoming data align with expectations.