Federal Reserve Governor Christopher Waller commented that based on a series of data points indicating inflation appears to be easing, he does not believe additional interest rate hikes will be needed. Waller stated, "Unless I see a substantial deterioration in the labor market, I will need to observe several more months of positive inflation data before I would feel confident supporting a relaxation of the current monetary policy stance."
The Federal Reserve has maintained its key interest rate between 5.25% and 5.5% since last July. Waller stated, "If the economic data were to continue weakening over the next three to five months, we could consider implementing a rate cut by the end of this year."
Federal Reserve officials have been hesitant to provide any precise timeline for when they anticipate implementing the initial interest rate reduction. Participants in derivative financial markets are anticipating the Federal Reserve to lower interest rates for the first time in September.
Waller pushed back against concerns that the Federal Reserve's benchmark interest rate is not high enough to slow demand and bring down inflation, stating that the April consumer price index (CPI) data indicates that progress towards the 2% inflation target has likely resumed.
This means that there isn’t a need for further rate hikes, he said.
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