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Federal Reserve Governor Christopher Waller said he favors raising interest rates by a quarter percentage point at the central bank’s December policy meeting. He said he could support a half-percentage-point increase if inflation data continues to exceed expectations.
The Federal Reserve left its benchmark rate unchanged at its October meeting while seeking additional information on progress toward its 2% inflation target. Waller said the central bank needs to follow through on expected tightening to avoid an unintended easing in financial conditions.
The Bureau of Labor Statistics reported that the consumer price index rose 0.4% in October, above a 0.3% forecast, while core consumer prices increased 0.3%, compared with expectations of 0.2%.
Treasury yields rose following the inflation report and Waller’s comments. The 10-year Treasury yield increased by more than 14 basis points to 5.004%, while the two-year yield rose by more than 19 basis points to 4.748%.
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