Svmuu News: Federal Reserve Governor Waller said Monday that if future data indicate inflation remains well above the 2% target, the Fed may need to raise interest rates “in the near term.” He said current monetary policy is at a “crossroads.” Waller said the direction would be determined by new information, such as the CPI report due out Tuesday, and that if data trends took an unfavorable turn, the Fed is currently at a stage where it should not “rest on its laurels.”
Waller said, “At current policy levels, inflation could still gradually return to the 2% target. But I am equally concerned about the possibility of another scenario, namely that data in the coming weeks will show inflation remaining at elevated levels or even continuing to rise, which would require tighter monetary policy in the near term.” ” He specifically noted that he is concerned that recent inflation reports indicate price pressures appear to be spreading across the economy, extending beyond the effects of last year’s import tariff hikes or recent increases in energy costs, and may reflect broader, systemic inflation, which would require a tighter monetary policy.
Waller stated, “If core inflation comes in hot again this week, the FOMC will have to consider tightening monetary policy in the short term. We need to see inflation data consistently decline over several months before we can conclude that inflation is moving in the right direction.” (Jin Shi)