Federal Reserve Governor Christopher Waller said the US central bank is determined to bring inflation back to its 2% target in a speech that mostly avoided the current state of markets or monetary policy.
(Bloomberg) — Federal Reserve Governor Christopher Waller said the US central bank is determined to bring inflation back to its 2% target in a speech that mostly avoided the current state of markets or monetary policy.
“We have reaffirmed this numerical goal repeatedly since 2012, and, in tightening monetary policy since early last year, we’ve made clear that we’re determined to bring inflation down to 2%,” Waller said in remarks at an event sponsored by George Mason University’s Mercatus Center. “This is why we have taken forceful steps aimed at reducing inflation — and why we will stay on the job to achieve our objective.”
The majority of Waller’s remarks were about the legacy of the economist Bennett McCallum, whom the conference was named after. He didn’t comment on the near-term outlook for interest rates.
The US economy has shown surprising resilience in the face of the Fed’s aggressive rate-hiking campaign, which took the policy rate to 5.25% to 5.5% from zero in less than two years. The labor market remains strong, while inflation is starting to cool as supply channels normalize, more workers flow back into the labor pool, with possibly some increase in productivity.
Waller strongly reaffirmed the 2% inflation target while noting that the other side of the Fed’s mandate — maximum employment — is a level that may vary over time.
A rout in credit markets may suspend the need to tighten further for now, three Fed officials have said in recent days.
Fed Vice Chair Philip Jefferson on Monday told a conference that he would “remain cognizant of the tightening in financial conditions through higher bond yields” in assessing “the future path of policy.” echoing similar comments from other policymakers in recent days.
Futures markets are showing a less than 20% chance of another quarter-point increase when the Federal Open Market Committee meets Oct. 31-Nov. 1.
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