Christopher Waller Urges December Interest Rate Hike

Federal Reserve Governor Christopher Waller announced his support for an interest rate hike at the December meeting to preserve the central bank's credibility. Speaking in London on November 10, Waller stated he favors a 25 basis point increase regardless of whether October inflation data shows improvement.

Waller warned that the Federal Open Market Committee should consider a more robust 50 basis point hike if inflation readings are substantially higher than expected. He argued that a smaller increase in such a scenario would put the Fed's credibility at risk. His concerns center on the breadth of price increases, specifically elevated core goods and market-based services, noting that inflation remains well above the 2% target.

This position follows an October meeting where the FOMC decided to pass on a rate hike. That decision was not unanimous, as Governor Lisa Cook and Cleveland Fed President Beth Hammack both dissented. While Waller characterized the labor market as stable and the economy as growing at a healthy pace, he maintains that proactive rate adjustments are necessary to stabilize prices.