US Federal Reserve Governor Christopher J. Waller on Tuesday signalled support for a 25-basis-point interest rate hike at the Federal Open Market Committee's (FOMC) December meeting, while indicating that a larger 50-basis-point increase could be considered if October inflation remains elevated.
Speaking at the Bank of England Watchers Conference in London, Waller said he would support a rate hike even if inflation improves in October.
"While I am hoping for an improvement over September, even if this occurs, I would still support a 25 basis point increase in the FOMC's policy rate at our December meeting. However, if inflation comes in substantially higher than I expect, more robust action by the FOMC may be called for," he said.
Waller said the US economy continues to expand strongly, with employment remaining close to its long-term level. However, he cautioned that inflation remains a major concern for monetary policymakers.
"I believe further tightening of monetary policy will be needed, sooner rather than later, to return inflation to a path that will reach 2 percent in the medium term," he noted.