Christopher Waller, governor of the Federal Reserve, has urged his colleagues to hold the federal funds rate steady at its current 3.5% to 3.75% range at the upcoming FOMC meeting. The three-month core inflation rate dropped from 4.76% in February to 3.05% through July, still above the Fed’s 2% target but showing encouraging downward momentum. Waller argues that a single 25-basis-point rate hike would have limited impact on pushing CPI closer to target. He acknowledged risks from 2025 tariffs, elevated energy costs tied to Middle East conflicts, and AI-driven pricing dynamics. Markets could benefit from a short-term reprieve if the Fed holds steady, though Waller remains data-dependent and would reassess if inflation data disappoints.
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