Fed Governor Waller said his September rate decision will largely depend on next
week’s August CPI; a sufficient uptick in inflation could lead him to support a
hike at the upcoming policy meeting. He said continued progress toward the Fed’s
2% goal would make him favor holding the policy rate, while inflation printing
above expectations would prompt him to consider tightening. Waller described
current policy as modestly restraining growth and added that an inflation
acceleration would not automatically compel tightening, but evidence in August
that momentum toward 2% has reversed would justify a small policy adjustment to
ensure inflation returns.
