The Feds Christopher Waller Warns of Higher Rates Soon if Inflation Stays High

A top official at the Federal Reserve said the central bank might soon have to raise interest rates if this week’s inflation data comes in higher than expected.Christopher J.Waller, a Fed governor, laid out his concerns on Monday about inflation, which has surged to a three-year high since the war with Iran began.

Measures of underlying inflation, which strips out volatile food and energy items, remain stubbornly high, fueling fears that price pressures are at risk of being embedded in the economy in a more permanent way.With the labor market relatively stable, policymakers at the Fed have put their attention squarely on inflation.Now, officials on the policy-setting Federal Open Market Committee face a stark choice: hold rates steady and risk a more persistent inflation problem or raise rates and risk unnecessarily choking off growth.“If we get another hot reading on core inflation this week, then the FOMC will need to consider tightening monetary policy in the near term,” Mr.

Waller said in prepared remarks at an event hosted by the New York Association for Business Economics.The Fed meets next to vote on rates on July 28 and 29.Sternly staring at inflation until it melts before our withering gaze is not an option, Mr.

Waller added.His comments come just one day before the Bureau of Labor Statistics releases June’s Consumer Price Index report.It is expected to show inflation slipping to 3.8 percent compared with the same time last year and prices dipping 0.1 percent for the month.

Once energy prices and other volatile items like food are excluded, “core” inflation is forecast to have inched down to 3.8 percent, following a 0.2 percent rise in monthly prices.The Producer Price Index, a measure of the costs that businesses pay for goods and services, will also be released this week.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access.

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