Fed Waller Says Higher Interest Rates May Be Necessary In 2022 If Inflation Remains High



More aggressive monetary policy may be needed next year if inflation figures remain elevated, Federal Reserve Governor Chris Waller said on Tuesday.

In a speech to the Stanford Institute for Economic Policy Research, Waller said his base case remains that this year’s high inflation readings start to moderate.

Still, the Fed governor said he sees “upward pressure on inflation that deserves to be watched.”

The next few months will tell the story, he added.

“If the monthly inflation numbers continue to be high… a more aggressive policy response than a simple cut may well be warranted in 2022,” Waller said.

Fed officials will meet in two weeks to decide whether to start slowing down the $ 120 billion a month purchases of Treasuries and mortgage-backed securities in mid-November or December.

Waller said he would support the start of the buying slowdown in mid-November.

Tim Duy, chief US economist at SGH Macro Advisors, said the Fed’s comments are moving in an overall hawkish direction. He said it would be important to see if Fed Chairman Jerome Powell pushes back the speech during his next speech on Friday.

DJIA actions,
+ 0.56%

+ 0.74%
were higher on Tuesday thanks to strong results.


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