Fed's Waller says series of half point rate increases may be needed at coming meetings - CNBC
Reuters
Published Mar 18, 2022 09:29AM ET
WASHINGTON (Reuters) - Federal Reserve Governor Chris Waller said economic risks around the war in Ukraine led him to vote in favor of a quarter percentage point rate increase at the Fed meeting this week rather than dissent in favor of the larger half point increase he had been advocating.
"The data is screaming at us to go 50 (basis points) but the geopolitical events were telling you to go forward with caution," Waller said on CNBC. But in the months ahead Waller said he would favor a series of half percentage point increases to "frontload" tighter policy and have a quicker impact on inflation.
"Going forward that will be an issue about going 50 in the next couple of meetings or not, but the data is suggesting we move in that direction," Waller said.
The Fed on Wednesday approved its first rate increase since 2018 to focus on taming inflation that is currently above 6%, far higher than the central bank's 2% target.
Most Fed officials see rates rising to around 1.9% by the end of the year, a pace equivalent to a quarter point increase at each of the central bank's 6 remaining meetings.
To counteract inflation faster Waller said the central bank should pack more of that into the next few months.
"I really favor frontloading our rate hikes...Just do it rather than just promise it," he said.
While he did not specify where he would like to see the target federal funds rate end the year, he said he would prefer to get above the 2 to 2.25% level he sees as acting neutrally for the economy.
In projections issued Wednesday, 3 policymakers projected rates should end the year at 2.375%, and one projected 2.625%. The most aggressive, St. Louis Fed president James Bullard, feels rates should end the year at 3.125%.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.