Fed's Waller Urges Patience on Rates Before July 28-29 Meeting as CPI Seen Slowing to 3.8%
Updated
Updated · CNBC · Jul 13
Fed's Waller Urges Patience on Rates Before July 28-29 Meeting as CPI Seen Slowing to 3.8%
3 articles · Updated · CNBC · Jul 13
Summary
Christopher Waller said the Fed should not rush into a rate hike before seeing more inflation data, even as price pressures remain above the 2% target.
Waller argued inflation is no longer just about tariffs and energy, pointing instead to broader forces including AI-driven demand spillovers that could keep prices elevated.
June CPI due Tuesday is expected to show headline inflation slowing to 3.8% from 4.2% and core easing to 2.8% from 2.9%, though Waller said he would need several softer months.
If inflation does cool, Waller said he would favor holding rates at the current target range; if it stays high or rises, tighter policy could be needed soon.
Markets currently price about a 39% chance of a rate increase at the Fed's late-July meeting, underscoring how pivotal the next inflation reading has become.
With AI investment fueling inflation, can the Fed cool the economy without crippling America's technological future?
Will raising interest rates actually lower gas and food prices that are being driven by the war with Iran?
2026 Fed Policy Shift: Rate Hikes on the Table as Inflation Hits 3.8% and Markets Brace for Volatility
Overview
In July 2026, the Federal Reserve made a significant shift in its monetary policy, moving from a stance that favored rate cuts to one where a rate hike is now firmly on the table. This change was driven by persistent inflation concerns and a notable hawkish pivot from key officials, including Governor Christopher Waller, who previously supported easing but now warns that inflation is not improving. The Fed’s removal of its 'easing bias' signals that a rate cut is no longer more likely than a rate increase, reflecting a broader consensus that tackling inflation has become the dominant concern for policymakers.