ATFX-Federal Reserve Governor Waller: One more rate hike won't tip the U.S. into recession

atfxFX - Federal Reserve Governor Waller said Tuesday,With recent data showing a sustained slowdown in inflation, policymakers can "tread carefully".

In an interview, Mr. Waller said the recent data "will allow us to proceed with caution," adding, "There is no indication that we need to take any action anytime soon"So we can wait for the data and see if the situation continues on its current trajectory."That could suggest a "suspension vote" at the Fed's September meeting.

On Friday, the labour department reported that job gains had been steady in August even though the unemployment rate had soared to 3.8 per cent from 3.5 per cent in July, a week when markets were still debating the need for the Federal Reserve to tighten monetary policy further to curb inflation.

Federal Reserve officials will hold their September meeting on September 19-20, and the future market expects the possibility of a September rate hike to be almost zero. At present, policymakers are trying to judge whether the current federal funds rate is restrictive enough to slow demand and bring inflation back to its 2% target.

In recent days, Federal Reserve officials have said,Although inflation remains too high, it is falling backThey also said,Any move depends on dataThe last time the Fed raised interest rates was at the end of July, when it chose to raise its policy rate by 25 basis points to a range of 5.25% -5.50%

Financial marekt thinks Fed rate hikes are over, but WallerRightDon't make such assumptions, the warning said, pointing out.The Fed has made this mistake beforeHe said:

"Whether rates will rise again depends on the data, and I mean we have to wait and see if this disinflationary trend continues."

RightIn the labor market, currentlyRightThe demand for labor is gradually slowing downAverage growth in non-farm payrolls has slowed to 150,000 a month over the past three months, compared with 287,000 a month in the first five months of this yearRightIn this opinion,Last week's data clearly showed that the job market began to weaken"If we can keep inflation at 2 percent for the next few months, we're in pretty good shape."

Waller also pointed out that another rate hike would not be necessaryRightThe labor market is doing too much damage. He said that while unemployment has risen,Hiring remains at an all-time high"Therefore, even if we raise interest rates again, it will notRightThe job market does significant damage and is unlikely to tip the economy into recession. "

In addition, WallerI don't think the jump in U.S. bond yields will bring more resistance to U.S. economic growthOn the contrary, he believes the situation is complementary to the Federal Reserve's policy actionsWaller said:

"I think Treasury yields are probably where they should be, and from what's going on in the Treasury market, they're not beating expectations compared to our policy rate."

Waller also said that as the way office workers work changes,The Federal Reserve is monitoring risks in the commercial real estate sectorBut he said,He doesn't see much evidence that the challenges facing the industry could harm the overall economy。

Cleveland Fed President Mester continued to call for tighter policy to contain price pressuresShe expressed thatThe Fed may need to raise interest rates "a little bit"Meister said on Tuesday:

"From the current situation, I can fully imagine that we may need to raise the policy rate further. But there is still a long way to go before we make our next decision in September, when we will have a lot of data and information."