Waller supports a rate hike in December; if October CPI is high, he may advocate for a 50 basis points increase.

Federal Reserve Governor Waller recently stated that he supports a rate hike in December and warned that if inflation continues to accelerate, he will support a 50 basis point increase to maintain the Fed's credibility. Waller's strong stance is the clearest articulation so far from a Fed official backing a December rate hike, believing not only that policymakers need to raise rates in December, but that the increase could exceed the 25 basis points expected by the market. Waller indicated that the US economy is strong, the labor market is stable, but inflation remains too high. He linked the policy stance to the October Consumer Price Index data to be released later Tuesday by the US Bureau of Labor Statistics. Waller said, "If the October CPI data released later today is similar to the previous two months, with core CPI rising around 0.3% month-on-month or even higher, more forceful policy action might be required. In such a case, raising rates by the usual 25 basis points would put our credibility at risk, and I am unwilling to take that risk."