Home / News / World /  US Fed official open to slower rate hike in December

After the US inflation slowed down in October, everyone was waiting for the reaction by US Federal Reserve and know how it will perceive the slowdown. On Wednesday, the Federal Bank Governor Christopher Waller provided the clearest signal and said the slowdown in inflation will allow the central bank to dial back the pace of interest.

After four consecutive super-sized moves, positive developments in the latest data, "have made me more comfortable considering stepping down to a 50-basis-point hike" in December, he said in a speech, according to news agency AFP.

The recent policy statement of the Fed flagged a step down from the level of earlier hikes. The officials are surely looking at giving more time to the economy to let it evolve amid the economic crises and are considering leaving the economy inflation free while monitoring it.

“One report does not make a trend. It is way too early to conclude that inflation is headed sustainably down. Getting inflation to fall meaningfully and persistently toward our 2% target will require increases in the federal funds rate into next year. We still have a ways to go." Waller said.

While Fed is raising interest rates to curb inflation, on one hand, consumer spending in the US is increasing on the other, indicating that fight against inflation is far from over. In October, retail sales had their biggest gains in 8 months, according to the US commerce department. The steadfast consumer is making the task of the Fed difficult, who has indicated to slow down the interest rate hike.

“So long as people remain willing to run down excess savings in the face of higher borrowing costs and uncertainty over the economic outlook, consumption will stay reasonably strong into next year, partly offsetting weakness elsewhere and keeping the economy as a whole out of recession," Kieran Clancy, senior US economist at Pantheon Macroeconomics said in a note quoted by news agency Bloomberg.

 

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