Latest: The October print landed on Waller’s threshold. Core consumer prices rose 0.3 percent in October, a third straight month at that pace, and headline prices rose 0.4 percent, the Bureau of Labor Statistics reported at 8:30 a.m., in the full CPI story published today. That is the pattern Waller said, in the speech below, should put a 50 basis point December move on the table.
Federal Reserve Governor Christopher Waller said inflation remains well above the FOMC’s 2 percent goal and that further tightening will be needed sooner rather than later, telling an audience at a Bank of England event that he is leaning toward supporting a 25 basis point increase in the policy rate at the December meeting even if, as he expects, the monthly inflation rate improves in October. September’s data were, in his words, bad with no silver lining: PCE inflation rose 0.5 percent on the month and 3.7 percent over the year, core PCE rose 3.1 percent over the year, and more than 70 percent of core PCE service price components rose by more than 3 percent over 12 months. If the October CPI data due later today instead repeat the recent pattern, with core inflation around 0.3 percent or higher, Waller said a 50 basis point hike should be considered in December, because hiking only 25 would put the Fed’s credibility at risk.