Fed’s Waller says larger hike should be considered if October CPI runs hot

Federal Reserve Governor Christopher Waller said Tuesday he would support a 25-basis-point interest rate hike in December even if October inflation improves, and that a larger 50-basis-point move should be considered if price pressures stay strong.

Speaking in London hours before the release of October consumer price index data, Waller said the U.S. economy is growing strongly and the labor market is stable, but inflation remains too high.

“While I am hoping for an improvement over September, even if this occurs, I would still support a 25 basis point increase in the FOMC’s policy rate at our December meeting,” he said. “However, if inflation comes in substantially higher than I expect, more robust action by the FOMC may be called for.”

“Let’s just say it. September’s inflation data were bad,” he said.

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