Waller noted that this direction will be determined by new information—including Tuesday’s CPI report—and emphasized that the Fed is currently in a phase where it should not “become complacent” should data trends take an adverse turn.

Waller said: “Inflation could still gradually decline to the 2% target at the current policy stance. However, I am equally concerned about the alternative scenario—where data over the coming weeks shows inflation remaining elevated—or even rising further—which would necessitate tighter monetary policy in the near term.”

He specifically expressed concern that recent inflation reports suggest price pressures appear to be broadening across the economy, extending beyond the effects of last year’s import tariff hikes or recent energy cost increases, potentially reflecting more widespread, systemic inflation—requiring even more restrictive monetary policy.

Waller added: “If core inflation runs hot again this week, the FOMC will have no choice but to consider tightening monetary policy in the near term. It will take several months of consistently declining inflation data before we can conclude inflation is moving in the right direction.” (Jinshi)

[BlockBeats]