Fed’s Waller plans to support at least a quarter-point rate hike in December

Fed Governor Christopher Waller suggests that the Federal Reserve should raise short-term borrowing costs by at least a quarter-point in December, even if inflation data indicates a cooling of price increases. Despite hoping for an improvement over the September numbers, Waller would still advocate for a 25 basis point increase in the Federal Open Market Committee's policy rate during the upcoming meeting.

Waller bases this recommendation on the expectation that core inflation, excluding volatile food and energy prices, may rise 0.3% or more from September. If this occurs, a more substantial 50 basis point hike in the policy rate should be considered at the December meeting, as failure to act may undermine the Fed's credibility in fighting inflation.

Waller emphasizes that the precise timing of the rate hikes is less important than ensuring they are implemented in a reasonable timeframe to maintain monetary policy's effectiveness.