US Federal Reserve open to 50-bp hike at December policy meeting

"It is way too early to conclude that inflation is headed sustainably down," Christopher Waller, US Federal Reserve Governor

US Federal Reserve Governor Christopher Waller said he is now “more comfortable” with smaller rate increases going forward, though how high rates ultimately need to go depends on how decisively inflation slows.
 

Waller said he will not make a final decision about what to do at the Fed's December 13-14 policy meeting until the rest of the data between now and then is reviewed
 

He acknowledged the most recent reports were a “positive development” that he hoped would be “the beginning of a meaningful and persistent decline in inflation” back to the Fed’s 2 per cent target. Waller said that as it stands “the data of the past few weeks have made me more comfortable considering stepping down to a 50-basis-point hike,” in December and possibly to smaller quarter-point increases after that.
 

Waller said signs the economy and wage growth are slowing have added to his sense that Fed policy is beginning to do 

its job.
 

But he cautioned it was too early to pin down just how high rates may need to go.
 

“It is way too early to conclude that inflation is headed sustainably down,” he said. “Getting inflation to fall meaningfully and persistently toward our 2 per cent target will require increases in the federal funds rate into next year. We still have a ways to go.”