Fed's Waller: Won't Back a Rate Hike If August Inflation Keeps Cooling

Federal Reserve Board member Christopher Waller said on Thursday, September 3, 2026 (12 Shahrivar 1405), that if August inflation data shows the cooling trend continuing, he is prepared not to back a rate hike at the Fed's September meeting and to hold policy at its current level. According to Ecoiran, Waller acknowledged inflation remains above the Fed's 2 percent target but said a 25 basis point hike at a single meeting would do little to bring inflation to target while carrying real costs for the economy. Following his remarks, the odds of a rate hike priced into the FedWatch tool fell from about 60 percent to around 50 percent.

Waller cautioned the outcome is not yet settled: weekly US jobless claims rose to 206,000, slightly above forecasts, and the US nonfarm payrolls report is due tomorrow, Friday, September 4 (13 Shahrivar). Markets are also awaiting remarks from Cleveland Fed President Beth Hammack, which could push rate hike odds back above 50 percent. Arzdigital also covered Waller's comments, noting the final decision hinges on economic data released before the September meeting.