Federal Reserve Chairman Waller said on Friday that if policymakers cannot be confident that inflation is "returning to 2% at a clear and sufficiently rapid pace," the Fed "still has work to do." This suggests that if price pressures do not improve, the Fed's next move could be a rate hike. Waller made it clear that he still adheres to the Fed's long-standing policy of managing inflation by adjusting interest rates, which greatly increases the odds of another rate hike and may put him at odds w

Federal Reserve Chair Waller stated on Friday that if policymakers cannot be confident that inflation is “falling back to 2% at a clear and sufficiently rapid pace,” the Federal Reserve “still has work to do.” This suggests that if price pressures do not improve, the Fed’s next move may be an interest rate hike. Waller made it clear that he firmly adheres to the Fed’s longstanding policy approach of managing inflation by adjusting interest rates. This greatly increases the likelihood of another Fed rate hike, which could put him at odds with President Trump, who has long sought rate cuts. These remarks have essentially eliminated the ambiguity left previously. At the end-of-July press conference, Waller declined to comment extensively on whether a rate hike is needed to address inflation, which has surged sharply this year and remained above the Fed’s target for more than five consecutive years.