Fed's Waller calls Q3 US GDP growth a 'blowout' number that warrants watching
By Howard Schneider and Lindsay (NYSE:LNN) Dunsmuir
WASHINGTON (Reuters) — Third-quarter U.S. economic growth, at an annualized 4.9% rate, was a «blowout» performance that warrants watching as the Federal Reserve considers its next policy moves, Fed Governor Christopher Waller said on Tuesday.
«This was an outstanding quarter… this big blowout number,» Waller told an economic data seminar at the St. Louis Fed. In looking at the components of U.S. output, «everything was booming. So this is something we are keeping a very close eye on when we think about policy going forward.»
U.S. central bank officials including Fed Chair Jerome Powell have said they feel the U.S. needs a period of subdued economic growth for inflation to cool from the current level of around 3.4%, based on the Fed's preferred measure, to the central bank's 2% target.
Many economists and investors feel that an economic slowdown is likely underway, and largely expect the Fed to hold interest rates steady at the Dec. 12-13 policy meeting.
Waller, who has been among the most ardent advocates of aggressive Fed rate hikes to battle high inflation, did not include a policy recommendation in his remarks.
But he noted that after a run of «amazing» job growth, «the labor market is cooling a bit… It's clearly calming down,» with recent job growth more in line with the levels seen before the coronavirus pandemic, a development Fed policymakers also feel is necessary for inflation to return to the 2% target.
The Fed is in the process of weighing that and other data to determine if it will be necessary to raise its benchmark overnight interest rate beyond the current 5.25%-5.50% range that was set in July.
Against the economic growth seen in recent months, a
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