Overview
- Federal Reserve Governor Christopher Waller said Thursday he would support keeping the federal funds rate at 3.50%–3.75% if August data confirms continued disinflation.
- Waller noted inflation remains well above the 2% goal but left open a 25 basis point hike if August prints show a meaningful rebound.
- Markets moved quickly after his remarks, lowering the probability of a September hike and pushing Treasury yields and Fed‑funds futures down.
- Waller warned that PCE measurement issues, including planned revisions to non‑market price imputations, could shave a few tenths off reported 12‑month PCE and change how officials read the data.
- With Fed officials split between waiting for more confirmation and pressing to tighten, next week's CPI and PPI releases plus the PCE technical revisions are likely to decide whether the Sept. 15–16 FOMC raises rates or holds steady and will affect borrowing costs for households and businesses.