Waller signals possible 50-basis-point rate hike

Speaking in London, Waller stated that the U.S. economy remains strong and the labor market stable, but inflation is still elevated. He indicated that he would support a 25-basis-point rate increase if October inflation data comes in line with expectations, while emphasizing that a 50-basis-point hike should be considered if price pressures persist.

Waller stated that a stronger monetary policy response may be necessary if monthly core consumer inflation reaches 0.3% or higher. He warned that limiting the increase to just 25 basis points could undermine the Fed's credibility in its fight against inflation. Following recent hawkish remarks from Fed officials, financial markets priced in approximately an 85% probability of a rate hike in December.