WASHINGTON (AP) — In an address at the American Enterprise Institute in Washington, Federal Reserve Board member Christopher Waller expressed growing confidence in the Fed’s ability to bring inflation back to the central bank’s 2% target level. While acknowledging that inflation remains elevated and uncertain if recent slowdowns can be sustained, Waller’s optimism stands out as the most positive remarks from any Fed official since the aggressive rate hikes began in March 2022.
Waller emphasized, “I am increasingly confident that policy is currently well-positioned to slow the economy and get inflation back to 2%.” This statement follows Chair Jerome Powell’s more cautious comments earlier this month, where Powell admitted uncertainty about the Fed’s key short-term interest rate being high enough to fully combat inflation. The Fed has raised its rate 11 times in the past year and a half, now standing at approximately 5.4%, the highest level in 22 years.
Inflation has dropped from a peak of 9.1% in June 2022 to 3.2% in October, with October’s report showing flat prices compared to September, a development that Waller welcomed. Additionally, Waller pointed to recent data on hiring, consumer spending, and business investment indicating a cooling in economic growth from the high pace of the previous quarter. He believes that slower spending and hiring should further help in cooling inflation.
Waller stated, “Last month’s figures are consistent with the kind of moderating demand and easing price pressure that will help move inflation back to 2%, and I will be looking to see that confirmed in upcoming data releases.”
