(Bloomberg) -- Federal Reserve Governor Christopher Waller said policymakers can afford to “proceed carefully” with interest-rate increases given recent data showing inflation continuing to ease.
“There is nothing that is saying we need to do anything imminent anytime soon,” Waller said in an interview on CNBC Tuesday, signaling he supports holding rates steady at the central bank's next meeting. “We can just sit there and wait for the data.”
Fed officials will gather on Sept. 19-20 and futures markets are pricing in almost no chance of a rate hike. US central bankers are trying to judge whether their benchmark lending rate, which they raised to a range of 5.25% to 5.5% in July, is restrictive enough to slow demand and return inflation to their 2% target. Excluding food and energy, prices rose 4.2% for the year through July.
Economic signals remain mixed. Demand for labor is gradually slowing. Non-farm payrolls gains have slowed to an average of 150,000 a month over the last three months, compared with 287,000 a month in the first five months of the year.
However, demand remains resilient, helping keep overall growth buoyant, with estimates compiled by Bloomberg showing a median forecast for 2% annual rate of economic growth in the third quarter.
Waller said July 13 that he saw a need for two more quarter-point hikes this year “as necessary to keep inflation moving toward our target.”
He voted for the increase at the July 25-26 policy meeting.
Waller on Tuesday declined to say whether he would support another increase this year, saying that will depend on incoming data.
(Updates with further background starting in fourth paragraph.)
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