Fed governor Christopher Waller said on Wednesday he was concerned about the lack of progress on inflation and that it was possible not to raise rates at the US central bank's meeting next month, but the rate hike campaign is unlikely to end.
"I Don't Support Cessation of Interest Rate Increases"
"I don't support stopping rate hikes unless we have clear evidence that inflation is moving towards our 2% target," Waller said at the University of California, Santa Barbara Economic Forecast Project event.
"But whether we hike rates at the June meeting will depend on the data coming in over the next three weeks."
He said two data specifically on inflation would be critical, as well as data on a "too tight" labor market and wages rising too fast to be consistent with stable prices.
The credit conditions that have improved since the string of regional bank failures that began in March will also help shape his views, Waller said:
"Between now and June, we need to remain flexible about the best decision to take."
However, Waller said that even though there will be no interest rate hike at the meeting on 13-14 June, "prudent risk management will recommend not to increase interest rates at the June meeting, but to increase interest rates in July according to the incoming inflation data."
Waller's general hawkish views on the need to act more strongly against inflation led to the US central bank's aggressive rate hikes last year. Waller said core consumer inflation at 5.5% was "too high" and with 3.4% unemployment and 4.4% hourly wage growth, the labor market needed to relax to reduce price pressures.
*Not investment advice.