Federal Reserve Governor Christopher Waller said on Wednesday,He’s open to a rate cut to 50 basis points in December。
In a speech in Phoenix, he said: “ButI won’t pass judgment on this until I see more data. “He also sworeDon’t be ‘fooled’ by last week’s encouraging inflation report。
Federal Reserve Governor Christopher Waller said on Wednesday that he is open to reducing the level of interest rate hikes soon, as long as economic data is performing well.
The Federal Open Market Committee (FOMC), which sets rates, is scheduled to meet on Dec. 13-14. Expectations were high that policymakers would approve another rate hike, but this time opted for a 50 basis point increase. Prior to this, the Federal Reserve has approved four consecutive rate hikes of 75 basis points.
In remarks prepared for an event in Phoenix, Waller said: “Looking ahead to the FOMC December meeting, the data of the past few weeks makes me more willing to consider a rate hike of 50 basis points. But I’m refraining from passing judgment until I see more data, including the next PCE inflation report and the next jobs report. “
The next PCE inflation report is scheduled for Dec. 1.
Investors are increasingly optimistic that October’s CPI data came in below expectations, suggesting that inflation is cooling. The overall CPI in the United States in October increased by 0.4% month-on-month and 7.7% year-on-year, and the core CPI excluding food and energy increased by 0.3% month-on-month and 6.3% year-on-year. All figures were lower than market expectations.
The Fed prefers core PCE as a measure of rising prices. In September, the core PCE rose 0.5% month-on-month and 5.1% year-on-year.
Waller said he will be watching the data closely as heStill skeptical October CPI data confirms a new trend。
“While this is good news, we must be careful not to read too much into an inflation report,” he said.Don’t know how long the deceleration in consumer prices will last. I can’t stress this enough,A report does not represent a trend. It is too early to conclude that inflation is continuing to decline. “
Waller said that in making his assessment, he would be looking at three main data points besides the broad inflation data: core commodity prices, housing and non-housing services. He said he saw encouraging signs on all three fronts, but needed to see more, and vowed not to be “blinded by one report”.
“Like many others, I hope this CPI report is the start of a meaningful and sustained decline in inflation. But policymakers cannot act on hope,” he said.
Earlier in the day, San Francisco Fed President Daly said sheAt least 100 basis points of rate hikes are expected in the future. The Fed’s benchmark interest rate is currently in a target range of 3.75%-4%.
Based on the above news, if the Fed slows down the interest rate hike to 50 basis points at the next meeting, as predicted by the directors, the US dollar index is expected to be boosted, but the rebound may be limited, and investors need to be vigilant about this.
US dollar index daily chart
At 13:14 on November 17th, Beijing time, the US dollar index was at 106.48