Federal Reserve Governor Chris Waller said Tuesday that a half-point rate hike remains possible for December. The size of the move will depend on October consumer price data, he added.
Waller’s comments introduce a larger increase than the quarter-point rise many investors had expected. The Fed has been raising rates to cool inflation, which remains above its 2% target.
October’s consumer price report is due later this week and will be a key input for the decision. A hotter-than-expected reading could push officials toward a bigger hike.
The central bank has already lifted rates sharply this year. Officials have signaled they want to slow the pace of increases but keep pressure on the economy.
Markets have been volatile as investors weigh how far the Fed will go. A half-point move in December would signal that policymakers see continued inflation risks.
Waller did not commit to a specific size for the December hike. He said the data will guide the decision, leaving options open.
The Fed’s next policy meeting is scheduled for December 13-14. Rate decisions will hinge on inflation data and how the economy responds to tighter financial conditions.
