Fed's Waller says September rate decision hinges on August inflation data

Federal Reserve Governor Christopher Waller signaled a data-dependent stance for the Fed’s September meeting, suggesting he would likely support holding rates if inflation continues to progress toward the 2% goal but would consider a rate hike if inflation accelerates. He indicated disinflation has been encouraging and that policy is only slightly restrictive, implying a small uptick in inflation could tilt him toward tightening. Market expectations remain split, with some officials and traders pricing in a September move while others see a pause as the baseline. Other Fed officials have voiced hawkish views, suggesting a rate rise could be appropriate if inflation does not ease, while Waller emphasizes reliance on upcoming inflation data. The debate centers on whether recent inflation signals are durable enough to sustain a pause or require renewed tightening, with August CPI seen as a pivotal data point.