Fed Governor Waller: Central Bank Can Proceed Cautiously with Interest Rates

Federal Reserve Governor Christopher Waller acknowledges that recent strong economic data will allow the central bank to proceed cautiously on interest rate hikes. Waller highlights the importance of inflation and the need to determine whether the recent low inflation is a trend or an outlier. While Waller is generally considered hawkish, he believes the Fed can afford to hold rates higher until it is certain that inflation is under control. Markets are predicting a high chance of the Fed skipping a rate hike in September, but there is some uncertainty for an increase in October. Waller suggests that one more rate hike would not significantly harm the job market.