Fed's Waller Signals Potential Rise in Neutral Interest Rate

Federal Reserve Governor Christopher Waller indicated that a key underlying interest rate, known as R-star, could rise in the future, though it is too early to confirm. R-star is the interest rate level that neither stimulates nor restricts the economy. Waller noted that increased demand for Treasury debt issuance versus supply could put upward pressure on R-star, potentially leading to higher borrowing costs. He did not comment on short-term inflation trends or the outlook for interest rates ahead of the next Federal Open Market Committee meeting.