Fed's Waller sees 'no rush' to cut interest rates
(Reuters) — U.S. Federal Reserve policymakers should delay interest rate cuts by at least another couple more months to see if a recent uptick in inflation signals stalling progress toward price stability or is just a bump in the road, Fed Governor Christopher Waller said on Thursday.
Core consumer prices rose 0.4% in January from a month earlier, well above the pace consistent with the Fed's 2% annual inflation goal.
That, along with a 3.3% annualized increase in fourth-quarter GDP and the more than 350,000 jobs added to the U.S. economy in January, «has reinforced my view that we need to verify that the progress on inflation we saw in the last half of 2023 will continue and this means there is no rush to begin cutting interest rates to normalize monetary policy,» Waller said in remarks prepared for delivery in Minneapolis.
Progress on inflation, he said, has been both «real» and «considerable.» Accounting for the latest data, he said, January inflation by the core personal consumption expenditures index — to be released next week — will likely come in at 2.8%. It stood at 4.9% a year ago.
While inflation is still «likely» on track to reach the Fed's 2% goal, he said, «I am going to need to see at least another couple more months of inflation data before I can judge whether January was a speed bump or a pothole.»
And with most other economic data suggesting the economy is still fundamentally solid, he said, «the risk of waiting a little longer to ease policy is lower than the risk of acting too soon and possibly halting or reversing the progress we’ve made on inflation.»
The U.S. central bank has held its policy rate steady in the 5.25%-5.5% range since last July, and minutes of its policysetting meeting last month
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