Federal Reserve Governor Christopher Waller expressed confidence in current inflation trends and optimism regarding inflation's trajectory. He indicated that he would be inclined to leave interest rates unchanged as long as inflation continues to slow, a stance that led to a rise in Treasuries.
Waller stated that his next decision on interest rates will be heavily influenced by August inflation data due next week. While he did not commit to whether an interest rate hike is necessary, he noted that he would consider a hike if inflation comes in hot. He added that it may not take much to nudge him toward supporting a rate hike at the Fed's upcoming policy meeting if progress does not continue.
Separately, Federal Reserve Bank of New York President John Williams said there is evidence that inflation continues to ease as the impact of tariffs fades and higher energy prices do not spread to other services. Waller's confidence in current trends appears to contrast with statements made last week by Chairman Kevin Warsh.