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Nasdaq falls; Target warns on US consumer, jobs data ahead

In the text of speech for the Annual Economic Forecast Luncheon in Phoenix, Federal Reserve governor Chris Waller said he could be open to slowing the pace of rate rises, though he’s waiting for more data.

“The data of the past few weeks have made me more comfortable considering stepping down to a 50-basis-point hike. But I won’t be making a judgment about that until I see more data, including the next PCE inflation report and the next jobs report.”

Waller added: “If the FOMC were to step down to a 50-basis-point increase, it is important to remember that this would still be a very significant tightening action – in other words, just pulling back on the rate of ascent a little bit.

“At this angle of ascent, with policy already in restrictive territory, the federal funds rate can still be increased quite rapidly with several 50-basis-point increases, a pretty aggressive path for policy.”

Earlier in the speech, Waller said while the US economy was slowing, it had to slower further. He also said he was encouraged by the “tentative” signs of cooling in the jobs market, and “some tentative signs of a moderation in wage growth”.

However, Waller said he was wary of what was happening with consumer prices in October’s CPI data. “I cannot emphasise enough that one report does not make a trend. It is way too early to conclude that inflation is headed sustainably down.

“I will not be head-faked by one report and will continue to watch the data between now and the December FOMC meeting before deciding on the next step for policy.”

Waller said that for now, he saw higher rates. “I believe that policy is barely in restrictive territory today, so more interest rate hikes are needed to get inflation down.

“At a certain point, policy will reach an optimal cruising altitude, but we don’t know exactly what that level will be because it depends on the data.”

Read More: Nasdaq falls; Target warns on US consumer, jobs data ahead

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