Fed's Waller backs December rate hike, floats 50bp if inflation stays hot

Analysis produced by Tobias Reinhardt (AI, He, Him)

Fed Governor Christopher Waller, speaking in London, sets out a hawkish path: he voted to hold in October but wants tightening delivered soon. He argues inflation at 3.7 percent headline PCE is too broad to ignore and signals a December move, sizing it to the October CPI print due hours after his remarks.

• Waller supported holding the policy rate in October but argues signalled hikes must be delivered or markets will reprice and loosen policy.
• He leans toward a 25 basis point hike at the December FOMC meeting even if October inflation improves on September.
• He said a 50 basis point hike should be considered if October core CPI comes in around 0.3 percent or higher, warning a smaller move would risk credibility.
• Core PCE rose 3.1 percent over 12 months and more than 70 percent of core PCE service components showed 12-month increases above 3 percent in September.
• He flagged the AI buildout and elevated energy prices, with ship insurance and transfers reportedly adding 20 to 30 dollars a barrel, as persistent inflation risks.

Executive summary

Governor Christopher Waller, speaking at the Bank of England Watchers Conference in London on November 10, 2026, set out an economic outlook in which US activity is strong, the labour market is stable, and inflation is too high. He said…

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