Christopher Waller, a member of the United States Federal Reserve, announced at a press conference in London that if the inflation situation improves in October, he will continue to support a 25 basis point interest rate increase at the December meeting. However, he also warned that if price pressures persist, a 50 basis point increase should be taken into account.
Analysis of Economic and Inflation Situation
Waller stated at the meeting that the U.S. economy is growing well and the labor market is in a stable condition. However, he emphasized that the inflation rate remains high. He said: "While I hope for improvements compared to September, even if this improvement occurs, I will support a 25 basis point increase in the Federal Reserve's policy rate at the December meeting."
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He also referred to concerning inflation data from September, stating: "Let's be honest. The inflation data for September was bad." The Federal Reserve's preferred measure of inflation rose by 3.7 percent in September compared to the previous year, while the core measure, which excludes food and energy costs, increased by 3.1 percent.
Concerns About Rising Prices
Waller expressed concern that rising prices are spreading and warned that costs associated with AI-based technologies and high energy prices may not decrease soon. He stated that if the core inflation rate in October reaches around 0.3 percent or higher, the Federal Reserve should consider a 50 basis point increase in December.
He also emphasized that "an increase of only 25 basis points puts our credibility at risk, and I am not willing to take that risk." Waller explained that because markets had already anticipated future increases, he voted to maintain rates in October and stressed that it is important for these increases to ultimately occur.
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