A top Federal Reserve official said he is “increasingly confident” that the Fed’s interest rate policy will succeed in bringing inflation back to the central bank’s target level of 2%.
By means ofCHRISTOPHER RUGABER AP economics writer
November 28, 2023, 10:16 am
FILE – Christopher Waller, member of the Federal Reserve Board of Governors, poses for a photo on May 23, 2022, in Washington. Waller said Tuesday, Nov. 28, 2023, that the U.S. economy is cooling and inflation is steadily slowing, indicating that the Fed’s interest rate policy is succeeding in bringing price increases back to the central bank’s 2% range. (AP Photo/Patrick Semansky, File)
The Associated Press
WASHINGTON — A key Federal Reserve official said Tuesday that he is “increasingly confident” that the Fed’s interest rate policy will succeed in bringing inflation back to the central bank’s target level of 2%.
The official, Christopher Waller, a member of the Fed’s Board of Governors, warned that inflation is still too high and it is not yet certain whether a recent slowdown in price increases can be sustained. But he delivered the most optimistic comments of any Fed official since the central bank launched its aggressive series of rate hikes in March 2022, and indicated the central bank is likely done raising rates.
“I am increasingly confident that policy is currently well positioned to slow the economy and bring inflation back to 2%,” Waller said in a speech at the American Enterprise Institute, a Washington think tank.
Waller’s comments follow Chairman Jerome Powell’s more cautious remarks earlier this month, when Powell said “we have no confidence” that the Fed’s key short-term interest rate was high enough to completely beat inflation. The Fed has raised interest rates eleven times in the past year and a half to about 5.4%, the highest level in 22 years.
Inflation, measured year on year, fell from a peak of 9.1% in June 2022 to 3.2% in October. Waller said the October inflation report, which showed prices were flat from September to October, “was what I want to see.”
Waller noted that recent data on hiring, consumer spending and business investment suggested economic growth was cooling from the scorching annual pace of 4.9% in the July-September quarter. Slower spending and hiring, he said, should help cool inflation further.
Last month’s figures “are consistent with the kind of moderating demand and easing price pressures that will help bring inflation back to 2%, and I will be looking to see this confirmed in coming data releases,” Waller said.