Christopher Waller says he’s prepared to take rates past ‘neutral’ to combat inflation

Governor Christopher Waller of the Federal Reserve stated on Monday that he expects interest rate hikes to continue through the rest of the year to keep inflation under control.

In particular, the central bank official stated that hikes over the “neutral” level, which is neither helpful nor restrictive for growth, would be supported.

According to Fed officials’ estimates from March, the neutral rate is 2.5%, which indicates Waller expects rates to rise at least another 2% points from here.

In remarks delivered in Frankfurt, Germany, Waller remarked, “Over a longer length of time, we will learn more about how monetary policy affects demand and how supply constraints are evolving.” “I am prepared to do more if the data suggest that inflation remains stubbornly high.”

The words back up the sentiment expressed in the minutes of the Federal Open Market Committee’s rate-setting meeting in early May. Officials feel “a restrictive stance of policy may well become appropriate depending on the evolving economic outlook and the risks to the outlook,” according to the meeting statement.

The Fed is expected to boost benchmark borrowing rates to a range of 2.5% -2.75%, in line with a neutral rate, according to market expectations.

If inflation continues to climb, the Fed is likely to raise interest rates even more. The federal funds rate is currently set at a range of 0.75% to 1%.

As per the minutes, policymakers expect rates to rise by 50 basis points over the next few meetings. Waller said he agrees with the Fed’s stance, which is aimed at taming inflation, which is nearing its highest level in more than 40 years.

“In particular, I am not taking 50 basis-point hikes off the table until I see inflation coming down closer to our 2 percent target,” Waller said.

“And, by the end of this year, I support having the policy rate at a level above neutral so that it is reducing demand for products and labor, bringing it more in line with supply and thus helping rein in inflation,” he added.

6 Responses

  1. Under control, you have got to be kidding me!!! Biden and his administration are solely responsible for inflation and continue to make it worse. Under Trump we were flourishing as a nation, now the Dems have cancelled everything that made us financially solvent!!!!

  2. Screw Democrats. We saw the scewup before they did. We’re sliding into multiple crises that Biden Policies and Demorat acceptance of everything Biden says. Good Lord Biden is crazy & unable to serve. Biden has dementia!!!

    1. Exactly Donna screw the Democraps Biden & all the Democraps need too go he has messed our Great Country too a point of total Disaster Trump had things not everyone agreed on but what Biden is doing too Destroy our Country he needs to be brought up on treason charges and put in prison !!!!

  3. all of you people need to go hurting and lieing to the American people all the time we American are WELL AWARE OF THE DEMS AND BIDEN?HARRIS GAMES THEY ARE PLAYING WITH US. GET OUT NOW!!!!!!!!!!!!! biden and dems need to be impeached for all of this. they blame everyone else for their actions . THEV AMERICAN PEOPLE ARE READY TO END THE PRESIDEN AND DEM PARTY THEY DO NOTHINMH BUT LIE TO US!!!!!!!!!!!!!!! BUT WE KNOW BETTER.

  4. Wouldn’t be necessary we’re the Devilrats to stop bs biden big money giveaways to any and all he sees and Ovomit tells him to give a billion to. Wouldn’t it be a real whizzer if the likes of the CCP or Russia would send a sack of a billion or two themselves?

  5. Raising interest rates in an economy with high unemployment only widens the misery. Now that unemployment is at reasonable levels, it is time to address the inflation problem. The Fed is doing the right thing by announcing future rate increases now, so that businesses can make their plans for stabilizing prices.

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