Christopher Waller, Federal Reserve Governor “we’ve still got a ways to go” Despite positive news about consumer prices last week, it will not be long before the US central banks stops raising interest rates.

Waller indicated that policymakers may also be starting to think about whether to reduce their speed following four consecutive hikes of 75 base points. Waller added that the Fed might consider a 50 basis point hike at its December meeting or the one after.

“These rates are going to stay — keep going up — and they’re going to stay high for a while until we see this inflation get down closer to our target,” Waller spoke Monday at UBS Group AG’s conference in Sydney. “We’ve still got a ways to go. This isn’t ending in the next meeting or two.”

These comments were echoed by Jerome Powell (Fed Chair) and other colleagues, who both said that while interest-rate rises are far from over, but could slow down in the near future.

Waller has been one of the US central bank’s more hawkish policymakers advocating for tighter policy to cool price pressures.

We need to continue to bring down inflation

Last week’s data showed that US consumer prices fell more than anticipated in October. The consumer price index rose 7.7% compared to 8.2% a year ago. 

Investors placed hard-won bets that the Fed would raise rates 50 basis points in December according to futures pricing. The benchmark rate will peak at 4.9% by mid-2023, according to pricing in futures.

“It’s good finally that we saw some evidence of inflation starting to come down,” Waller said. “We’re going to need to see a continued run of this kind of behavior on inflation slowly starting to come down before we really start thinking about taking our foot off the brakes here.” 

On Nov. 2, the Fed increased interest rates by 75 basis point to a range of 3.75% to 4.4%. It also stated that it will continue to increase its efforts to combat inflation, which is the highest in 40 years. 

Powell said that after the decision was made, Powell informed reporters that recent data had shown that rates will eventually have to rise higher than expected. He also indicated that the central banking could adjust the pace of its increases by December.

Officials in September forecast rates would reach 4.4% by the end of this year and 4.6% in 2023 — implying a half-point hike in December and a final quarter-point move next year. Next month, they will update their quarterly projections.

Register now for the Sunday Review Features email list so you don’t miss our biggest features, exclusive interviews, and investigations.