[Asia Economy New York=Special Correspondent Joselgina] Christopher Waller, a member of the Federal Reserve (Fed) Board, warned on the 8th (local time) that the fight against inflation is not over yet and could lead to higher interest rates than expected.
According to economic media CNBC, Waller stated at a conference held in Arkansas that "we are beginning to see the fruits of our efforts to lower inflation, but there is still a long way to go." He emphasized, "It could be a long fight with higher interest rates for longer than some currently expect, and we will not hesitate to do what is necessary to complete this task."
Waller evaluated the January employment report released last week, which showed job growth exceeding market expectations, as "a strong labor market." He also predicted that this strong employment indicator could fuel consumer spending, which acts as upward pressure on inflation. This supports the need for the Fed to continue its current tightening stance, having raised interest rates eight times since March 2022.
He said, "Some believe that inflation will come down quickly this year, which would be a welcome outcome," but added, "I do not see signs of a sharp decline in the data. We are preparing for a long-term battle to bring inflation down to the target."
These remarks came a week after the Fed raised the benchmark interest rate by 0.25 percentage points to 4.5?4.75% at the February Federal Open Market Committee (FOMC) meeting. Fed Chair Jerome Powell, following the FOMC press conference, also stated the previous day that the economy had recently entered the early stages of disinflation. Waller did not mention specific figures regarding the terminal rate or interest rate outlook.
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