Fed Governor Waller sees December hike likely, opens door to possible half-point increase
Summary
Federal Reserve Governor Waller stated that a rate increase is likely at the upcoming December meeting. He also indicated that he might support a larger half-point adjustment, depending on incoming inflation figures.
The policymaker said he "is leaning toward" a rate increase in December and could support a half-point hike depending on inflation data.
Our Take
Waller turned today's 8:30 a.m. ET inflation report into a simple test. His line is core CPI at 0.3% month over month: below it, he backs a quarter-point hike at the Dec. 8-9 meeting; at or above it, he wants a half-point on the table. Economists expect 0.2%. A December hike was already about 85% priced in before he spoke and is close to fully priced now, so the hike itself is not the surprise. The size is. A quarter point would take the Fed's range to 4.00%-4.25%.
Stocks are calm ahead of the number. SPY closed Monday at $752.69, up 2.4%, and is trading near $753 in pre-market. Long-term Treasuries (TLT) are flat near $81.90. Resistance is Monday's high at $755.42, then the $765-$767 gap left by last Thursday's selloff. Support is $741-$742 (Monday's low and Friday's high), then $733, last Thursday's close. A core reading of 0.2% or lower likely keeps the rebound alive; 0.3% or higher puts a half-point hike in play and $741 back in focus.
Opinion of Tech & Money Press. Not financial advice.
Source: Read the full story at US Top News and Analysis