Federal Reserve Governor Christopher Waller sees interest rate increases continuing through the rest of the year as part of an ongoing effort to bring the highest inflation levels seen in almost four decades.
“Over a longer period, we will learn more about how monetary policy is affecting demand and how supply constraints are evolving,” Waller said. “If the data suggest that inflation is stubbornly high, I am prepared to do more.”
He said he would support hikes that exceed the “neutral” level considered neither supportive nor restrictive for growth.
According to analysts the Central Bank is expected to raise benchmark rates between 2.5%-2.75%. However, if inflation continues to rise, it likely will go even further. The fed funds rate currently is set between 0.75% and 1%.
“In particular, I am not taking 50 basis-point (bps) hikes off the table until I see inflation coming down closer to our 2 percent target,” Waller said. “And, by the end of this year, I support having the policy rate at a level above neutral so that it is reducing demand for products and labor, bringing it more in line with supply and thus helping rein in inflation.”