US central bankers last month signalled they will raise interest rates three times this year and sped up the pace at which they are tapering their asset purchase program. A strong economy and labour market combined with consumer prices rising 7% last year have seen them pivot sharply toward combating the highest inflation since 1982.
Federal Reserve Governor Christopher Waller said that three interest-rate increases this year was a “good baseline” but there may be fewer or even as many as five moves, depending on inflation.
“Three hikes is still a good baseline; we will have to wait and see what inflation looks like in the second half of the year,” Waller said in an interview Thursday on Bloomberg Television with Kathleen Hays. “If it continues to be high, the case will be made for four, maybe five, hikes,” he said, but added that if inflation abated – as many forecasters including him expect it will – “then you could actually pause and not even go the full three.”
