Fed's Waller sees additional rate hikes to get inflation down faster

Key Points:

• Federal Reserve Governor Chris Waller indicated that additional interest rate hikes may be necessary to bring inflation down to the Fed's 2% target if economic data aligns with expectations.
• Waller highlighted persistent inflationary pressures driven by factors such as ongoing Middle East conflict uncertainties, high oil prices, the impact of artificial intelligence on high-tech consumer prices, and potential new tariffs from trade conflicts.
• He expressed concern that sustained high inflation over five and a half years could cause consumers, investors, and businesses to raise their future inflation expectations, complicating efforts to control inflation.
• Despite the rate hikes, Waller is not overly worried about a significant economic slowdown, noting that economic activity is expected to strengthen in the latter half of the year and that the labor market remains stable.
• Waller emphasized that near-term Fed policy will prioritize addressing inflation, reflecting the current economic data and conditions.