Fed governor: Further rate increases 'probably unnecessary'

Christopher Waller, a member of the Federal Reserve Board of Governors, said that further interest rate increases will be “probably unnecessary,” pointing to data showing that inflation is not “accelerating.” 

“Central bankers should never say never, but the data suggests that inflation isn't accelerating, and I believe that further increases in the policy rate are probably unnecessary,” Waller said Tuesday at the Peterson Institute for International Economics. 

But he added that before interest rate cuts could begin, he would need to witness “several more months” of good inflation numbers. 

“In the absence of a significant weakening in the labor market, I need to see several more months of good inflation data before I would be comfortable supporting an easing in the stance of monetary policy,” Waller said. 

The policymaker said some “moderate” progress has been made on the inflation front, characterizing the recent consumer price index report with a mid-tier grade. 

“That said, the progress was so modest that it did not change my view that I will need to see more evidence of moderating inflation before supporting any easing of monetary policy,” he said. “If I were still a professor and had to assign a grade to this inflation report, it would be a C+ — far from failing but not stellar either.” 

The mid-May report showed inflation falling in April to 3.4 percent. 

Waller did not share what improvements he would welcome in the upcoming inflation reports. 

“I will keep that to myself for now, but let's say that I look forward to the day when I don't have to go out two or three decimal places in the monthly inflation data to find the good news,” he said.