Morning Edition · Fri 9 Oct 2026
Fed's Waller Backs More Rate Hikes but Says They Need Not Come at Back-to-Back Meetings
Federal Reserve Governor Christopher Waller said Thursday that more rate hikes are likely needed to achieve 2% inflation, but increases do not have to occur at consecutive meetings, according to Reuters.
Chanan Zevin - Chief Editor and Head of Desks
Published
Waller Emphasizes Flexible Approach to Rate Hikes
US Federal Reserve Governor Christopher Waller stated on Thursday, October 8, that additional rate hikes will likely be necessary to return inflation to the central bank's 2% target, but stressed there is 'flexibility' regarding the timing of such increases, according to Reuters. Speaking at a Central Bank of Turkey forum in Istanbul, Waller said, 'If the economic data continue to come in as expected, I anticipate additional hikes to support a timelier return of inflation to our 2% goal.' He added, 'But there is some flexibility about when those hikes will occur. The hikes do not need to come at consecutive meetings, but they should be in place in an acceptable period of time.'
Waller's comments come as the Federal Reserve continues to weigh the balance between curbing inflation and sustaining economic growth. He noted that the case for higher rates has become clearer with strengthening economic activity and ongoing inflationary pressures. According to Reuters, Waller pointed to the unresolved energy price shock from the Iran war and increased demand from the artificial intelligence buildout as factors contributing to persistent inflation.
October Pause Expected, December Hike Possible
Waller's remarks align with recent statements from other Federal Reserve officials suggesting that the policy rate will likely remain steady at the current 3.75% to 4% range when the Federal Open Market Committee meets on October 27-28, according to Reuters. A rate increase is seen as more probable at the December 8-9 policy session if economic data continues to show low unemployment, ongoing growth, and only limited progress in reducing inflation.
The Fed last raised the policy rate by a quarter of a percentage point in September, and projections released at that time indicated that most central bankers expect another quarter-point hike by year-end, Reuters reported. Investors currently expect the Fed to keep rates unchanged at the October meeting, which falls just a week before US congressional elections, but anticipate a rate hike six weeks later in December.
Inflation and Market Expectations
Waller did not specify how much further the policy rate may need to rise, but noted that inflation remains more than a percentage point above the Fed's 2% target, according to Reuters. He expressed concern that the recent acceleration in inflation could prompt consumers, investors, and businesses to revise up their expectations for future inflation.
He emphasized that recent communication from Fed officials has helped markets set expectations for the interest rate path without committing to specific outcomes. Waller argued that this approach provides necessary signals to anchor short-term interest rates while retaining flexibility to adjust policy based on incoming data. According to Reuters, he stated, 'This signaling helps to anchor the path of short-term interest rates but provides flexibility in adjusting rate hikes based on incoming data.'
Why Waller's Comments Matter for Policy and Markets
Waller's statements are significant for financial markets and policymakers because they reinforce the Federal Reserve's data-dependent approach while clarifying that rate hikes may not follow a rigid schedule. This flexibility allows the central bank to respond to evolving economic conditions, helping to manage inflation expectations and reduce the risk of market volatility stemming from uncertainty about the Fed's intentions.
By communicating a willingness to pause between hikes, Waller and other officials provide investors with a clearer framework for anticipating future policy moves. According to Reuters, this approach aims to avoid the volatility that can occur if investors are left without any signal at all, supporting more stable financial conditions as the Fed navigates the path toward its inflation target.