Christopher Waller, a member of the US Federal Reserve's Board of Governors and a permanent voting member of the Fed's rate-setting Federal Open Market Committee, said the Fed may need to raise interest rates further to bring inflation back to its 2% target if upcoming economic data continue to come in as expected. Speaking today at the Istanbul Economic Forum, he said rate increases need not come at consecutive meetings but should be delivered within an appropriate timeframe, and he backed a rate hike in September, not only because of the August consumer price index data but also because of months of evidence showing hiring remains strong and inflation persistently high. Waller did not express concern that tighter financial conditions would significantly slow the US economy, since economic activity has picked up in the second half of the year, but he warned that the recent rebound in inflation is pushing consumers, investors and businesses that set prices for goods and services to raise their expectations for future inflation. He added that Fed officials' rate projections can reflect the direction of monetary policy, but future rate decisions will depend mainly on economic data.
Waller backs further Fed rate hikes, including a September hike, pushing the policy rate higher.
Hawkish Fed rate-hike signals lift the 10-year Treasury yield (bond prices fall).
