Posted on 07/17/22
| News Source: WSJ
Federal Reserve officials have signaled they are likely to raise interest rates by 0.75 percentage point later this month, for the second straight meeting, as part of an aggressive effort to combat high inflation.
Policy makers left the door open to a larger, full-percentage-point increase at the July 26-27 gathering. But some of them simultaneously poured cold water on the idea in recent interviews and public comments ahead of their premeeting quiet period, which began Saturday.
Some officials pointed to signs that economic activity was softening as they raise rates at a historically brisk pace. “You don’t want to overdo the rate increases. A 75-basis-point hike, folks, is huge,” Fed governor Christopher Waller said Thursday at a conference in Victor, Idaho. “Don’t say, ‘Because you’re not going 100, you’re not doing your job.’”
Before last week, officials had signaled they were leaning toward a 0.75-point, or 75-basis-point, increase this month. After another scorching inflation report was released Wednesday, however, they indicated they would consider a full-point increase.
“We knew this inflation report was going to be ugly, and it was. It was just uglier than we thought,” said Mr. Waller. But, he added, “we don’t want to make policy on one data point, and that’s kind of a critical thing.”
The Labor Department reported the consumer-price index rose 9.1% in June from a year before, a new four-decade high, and showed inflation pressures broadening across the economy.