In an interview with CNBC on Tuesday, Federal Reserve Governor Christopher Waller reassured the public that while the central bank does have room to raise interest rates, there is currently no pressing need to increase the cost of short-term borrowing. Waller’s remarks shed light on the Federal Reserve’s cautious approach to monetary policy in light of recent economic developments.
Waller emphasized that the current economic landscape provides the Federal Reserve with the opportunity to proceed with careful deliberation. He stated, “There’s nothing that is saying we need to do anything imminent anytime soon, so we can just sit there, wait for the data, see if things continue” on their current trajectory.
The Federal Reserve’s stance comes in the wake of the U.S. Labor Department’s report last Friday, which indicated that the economy had “continued to gain jobs at a solid clip” during August. However, the report also revealed that the unemployment rate had increased to 3.8% from July’s 3.5%. Waller noted that this data serves as a crucial benchmark for the central bank in determining whether an increase in interest rates is warranted.
The last time the Federal Reserve raised interest rates was in late July, pushing the policy rate to the 5.25%-5.50% range. Despite this recent increase, financial markets currently show only a slight chance of another rate hike at the upcoming September 19-20 meeting.
Addressing concerns about potential inflation associated with higher interest rates, Waller adopted a cautious stance. He emphasized that the central bank had exercised prudence in the past when facing similar circumstances and stressed that any rate increase, if deemed necessary, would not pose a significant risk to the labor market.
Waller also discussed the recent uptick in bond market yields, characterizing it as a reflection of the Federal Reserve’s policy actions. He asserted that yields were “not going off the charts” when compared to the established policy rate, indicating a relative stability in the financial markets.
Furthermore, Waller revealed that the Federal Reserve is currently monitoring the commercial real estate sector for potential risks. However, he assured that any issues identified would likely be contained within the sector itself and not pose a broader threat to the wider economy.
In summary, the statements of Federal Reserve Governor Christopher Waller reflect the central bank’s cautious approach to the potential for an interest rate hike. The latest economic data has provided the Federal Reserve with the necessary information to evaluate whether such a move is warranted in the coming months, while also ensuring that any decision would not undermine the stability of the job market. As the Federal Reserve continues to monitor economic developments, the public can expect a deliberate and data-driven approach to monetary policy decisions.
Source: Reuters
In an interview with CNBC on Tuesday, Federal Reserve Governor Christopher Waller reassured the public that while the central bank does have room to raise interest rates, there is currently no pressing need to increase the cost of short-term borrowing. Waller’s remarks shed light on the Federal Reserve’s cautious approach to monetary policy in light of recent economic developments.
Waller emphasized that the current economic landscape provides the Federal Reserve with the opportunity to proceed with careful deliberation. He stated, “There’s nothing that is saying we need to do anything imminent anytime soon, so we can just sit there, wait for the data, see if things continue” on their current trajectory.
The Federal Reserve’s stance comes in the wake of the U.S. Labor Department’s report last Friday, which indicated that the economy had “continued to gain jobs at a solid clip” during August. However, the report also revealed that the unemployment rate had increased to 3.8% from July’s 3.5%. Waller noted that this data serves as a crucial benchmark for the central bank in determining whether an increase in interest rates is warranted.
The last time the Federal Reserve raised interest rates was in late July, pushing the policy rate to the 5.25%-5.50% range. Despite this recent increase, financial markets currently show only a slight chance of another rate hike at the upcoming September 19-20 meeting.
Addressing concerns about potential inflation associated with higher interest rates, Waller adopted a cautious stance. He emphasized that the central bank had exercised prudence in the past when facing similar circumstances and stressed that any rate increase, if deemed necessary, would not pose a significant risk to the labor market.
Waller also discussed the recent uptick in bond market yields, characterizing it as a reflection of the Federal Reserve’s policy actions. He asserted that yields were “not going off the charts” when compared to the established policy rate, indicating a relative stability in the financial markets.
Furthermore, Waller revealed that the Federal Reserve is currently monitoring the commercial real estate sector for potential risks. However, he assured that any issues identified would likely be contained within the sector itself and not pose a broader threat to the wider economy.
In summary, the statements of Federal Reserve Governor Christopher Waller reflect the central bank’s cautious approach to the potential for an interest rate hike. The latest economic data has provided the Federal Reserve with the necessary information to evaluate whether such a move is warranted in the coming months, while also ensuring that any decision would not undermine the stability of the job market. As the Federal Reserve continues to monitor economic developments, the public can expect a deliberate and data-driven approach to monetary policy decisions.
Source: Reuters
