Fed Waller Supports a 75 basis points increase

Fed Waller Supports a 75 basis points increase

Fed Waller supports a 75 basis points increase later this month but it can be more than that.

At the Rocky Mountain Economic Summit Global Interdependence Center in Victor, Idaho, Waller said he is expecting another rate hike of 75 basis points. It will bring the range of federal funds to 2.25% to 2.5% before August.

He further said the level will be very close to neutral and neither restrict nor stimulates demand. It is also assumed that the growth pace of the economy is moderate and unemployment will be at the level where it is now.

Since March, Fed has already raised its benchmark rates by 150 basis points to handle record inflation.

In June, the rate hike of 75 basis points was the steepest in 28 years.

According to the CPI data, annual consumer inflation reaches to 9.1% high and Producer prices reached to 11.3% high last month.

The recent jump in inflation has increased the fears that Fed could decide to increase 100 basis points at the two-day meeting on July 27.

Waller said we will have important data on retail sales and housing before July. If the data reveals stronger than expected demand then there would be a chance of a larger rate hike at the July meeting to bring inflation down.  

Fed Waller Supports a 75 basis points increase and further added that we will have to move fast in taking decisions to cut inflation.