A senior Federal Reserve official said Friday that there has been little progress on inflation for more than a year and that more interest rate hikes are needed to get prices under control.
Christopher Waller, a member of the Fed’s governing board, did not specify how many more increases he supports, but said in written remarks that inflation “is still much too high and so my job is not done.”
Last month, inflation slowed as food and gas prices fell, but excluding those volatile categories, “core” prices kept rising and are 5.6% higher than a year ago. Waller pointed out that core prices have risen at about that same pace, or higher, since December 2021.
Waller’s comments expressing support for more rate hikes follow a forecast by the Fed’s staff economists, revealed in Fed minutes Wednesday, for a “mild recession” later this year.
Waller said that, like most of his colleagues, he is closely watching whether the collapse of two large banks last month will lead to a broad cut back in lending by the banking system, which could slow the economy.
But so far it’s not clear how large the impact will be, he said, and job growth remains strong and inflation is far above the Fed’s 2% target, “so monetary policy needs to be tightened further.”
His comments, to be delivered in San Antonio, Texas, echo those of several of his colleagues, who have said in recent weeks that they support at least one more rate hike. That would put the Fed’s benchmark rate at about 5.1%, the highest in 16 years.