Waller, The Signaling Value of the Summary of Economic Projections

AI desk brief

Fed Governor Waller said the September 25 bp hike to 3.75%-4.00% reflected a broader shift in risks, not a single CPI print, and argued policy now needs to stay focused on inflation. He said August core PCE ran at 0.25% m/m and 3.0% y/y, with 12-month core inflation stuck around 2.5%-3.0% since spring 2024, reinforcing that inflation is not making sufficient progress toward target.

Waller also tied the inflation outlook to persistent external shocks, citing the Middle East conflict keeping oil prices elevated, AI-driven high-tech price pressure, and trade/tariff risks. On communication, he discussed how the Fed can signal the expected policy path without full forward guidance, emphasizing that markets need clearer information on the pace and number of hikes to avoid volatility.