Fed’s Waller Backs 75 Basis-Point Rate and Says Bigger Move Depends on Data

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Fed's Waller Backs 75 Basis-Point Rate and Says Bigger Move Depends on Data

While the June consumer price index report released Wednesday was a “major league disappointment,” Waller stressed that his vote is contingent on additional data due before the July 26-27 Fed policy meeting, citing retail sales and housing.

Answering questions from Bloomberg’s Michael McKee following the speech, Waller said a 75 basis-point hike is “huge” and that if the Fed opts for such a move, it wouldn’t mean officials are failing to confront price pressures.

His comments were echoed by St. Louis Fed President James Bullard, who told Nikkei in an interview on Wednesday that was published Thursday that he favored hiking by 75 basis points later this month.

“Don’t say because you are not doing a 100 you are not doing your job,” he said, adding “you don’t want to really overdo the rate hikes.”

Story Highlights

  • “With the CPI data in hand, I support another 75 basis-point increase,” Waller said Thursday in remarks to a Global Interdependence Center event in Victor, Idaho.

  • “If that data come in materially stronger than expected it would make me lean towards a larger hike at the July meeting to the extent it shows demand is not slowing down fast enough to get inflation down,” said Waller.

“So far, we’ve framed this mostly as 50 versus 75 at this meeting. I think 75 has a lot of virtue to it” because it brings the benchmark rate to roughly the neutral level as seen by policy makers, Bullard was quoted as saying. “As of today, I would advocate 75 basis points again at the next meeting.”