Fed's Waller Seeks Middle Ground on Rate Hikes, Warns Against Waiting Too Long

According to Jin10, on July 14, Federal Reserve Governor Christopher Waller expressed concern about balancing the risk of premature rate hikes triggering a recession with the danger of delaying action too long. Waller noted that the current labor market is far less overheated than during the 2022-2023 rate hike cycle, and cited "credible reasons" suggesting inflation could continue declining without further policy tightening.

However, Waller cautioned that existing evidence from businesses and investors supporting lower inflation expectations is insufficient to justify the Fed waiting, as confidence will eventually erode and force more aggressive rate increases to catch up. "We cannot afford to ignore inflation until it completely disappears," he said.