Rate hike odds rise to 41% after Waller’s comments
Fed Governor Chris Waller has reversed his stance on monetary policy, citing higher-than-expected inflation over the past several months.
He noted that the next CPI report will be a useful signal, and if inflation comes down, he will need to see a couple more declining numbers to consider it a trend.
The market is pricing in 41 bps in hikes through year end, with the USD and JPY affected by the potential rate changes.
Waller’s concerns about a weakening jobs market have been resolved, and his stance is unlikely to shift back to dovish anytime soon.