Fed's Waller says further hikes likely, pace flexible

Federal Reserve Governor Christopher Waller said Thursday more rate hikes are needed but he is flexible about the pace. At the Central Bank of the Republic of Türkiye Istanbul Economic Forum, he said inflation is not showing sufficient progress and is approaching 5-1/2 years above the Fed's 2% target. He pointed to Iran conflict energy costs, possible new tariffs, and demand from the AI buildout. Hikes need not occur at consecutive meetings, he said, leaving room for a possible Fed hold in October. Waller called the labor market solid and stable, said the economy appears to be strengthening, and said further hikes are unlikely to cause a damaging slowdown. He gave no figure for how much further rates may need to rise. The U.S. Dollar Index sat near 102.30 after a muted market reaction. Contested: None found. Center and right-rated outlets reported the same core remarks without factual dispute. If the economic data continue to come in as expected, Waller said, further increases will be needed. FXS scored the speech 8/10 on its Speechtracker (tone score) against a 7.2 historical average, and its Fed Sentiment Index rose 0.42 points to 138.34. The size and calendar of any further moves remain open.