Federal Reserve Governor Christopher Waller said on Tuesday that the central bank must follow through on the rate hikes it has previously signalled, or risk its own credibility. Speaking in London, he said a 50 basis point increase at the December meeting could be warranted if economic data require it.
Waller said a 25 basis point move in December would put the Fed’s credibility at risk. Markets had been pricing in the smaller increase. He said he would back a December hike even if October’s inflation figures came in better than expected.
Divisions inside the committee
The Federal Open Market Committee held rates unchanged in October, but the decision was not unanimous. Governor Lisa Cook and Beth Hammack dissented. Chicago Fed President Austan Goolsbee had warned about inflation risks on Monday.
The next FOMC meeting is on 8-9 December. The October consumer price index was due on the same Tuesday.
Economy and labour market
Waller said the US economy is growing at a healthy pace and the labour market is stable. He has been a member of the FOMC since 2020.
By our market data, as of 09:24 GMT on 10 November, the federal funds rate stood at 3.88 percent, in force since 6 November.
Related: BoJ minutes show members split on pace of rate hikes · Riksbank raises rate to 2%, flags more hikes if outlook holds
Source: Federal Reserve | Data: FRED — St. Louis Fed
