The 2026 voter Waller supports a rate hike in December, even a 50 basis point hike.

Waller, a Federal Reserve governor and also a 2026 voter, stated in a speech on November 10 that even though inflation improved in October, he still favors supporting a 25 basis point rate hike by the Federal Reserve in December.

He also indicated that if the October core CPI month-on-month remains around 0.3% or higher, similar to the performance of the previous two months, the Federal Reserve should consider a 50 basis point hike. In this case, he believes that if only a 25 basis point increase is made, it may undermine the Federal Reserve's credibility in controlling inflation.

This speech was made before the CPI was released. At that time, I didn’t see it, and once the data came out, everyone knew that the U.S. October core CPI rose by 0.3%, reaching the value condition he mentioned. So theoretically, Waller not only supports a rate hike but also supports a 50 basis point hike; of course, I feel the probability of a 50 basis point increase is low.

Regarding the decision to maintain interest rates at the last meeting, Waller explained that the Federal Reserve's previous communication about further tightening policies had already led the market to price in part of the rate hikes, so there was no need to continuously raise rates at every meeting.

However, he believes that since a rate hike signal has been communicated to the market, it needs to be implemented within a reasonable timeframe. Otherwise, the market might lower its expectations for rate hikes, causing interest rates to fall and, in turn, resulting in looser monetary conditions.

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