US Fed official open to slower rate hike in December

Recent signs of easing inflation pressures and a slowing US economy could allow the central bank to dial back the pace of interest rate hikes, Federal Reserve Governor Christopher Waller said Wednesday.

The Fed has embarked on an aggressive campaign to rein in surging inflation this year, raising its benchmark lending rate six times, including four consecutive mammoth moves of 0.75 percentage points.

But positive developments in the latest data, "have made me more comfortable considering stepping down to a 50-basis-point hike" in December, Waller said in a speech, although he stressed that more rate increases are still needed to bring inflation down.

His comments came after reports showing inflation eased in October, with the consumer price index logging its lowest annual pace since January - fuelling hopes that soaring costs will start to pull back.

He noted that the pullback in prices was "widespread," involving a deceleration in services costs and the first drop since March in core goods prices, which strip out the volatile food and energy segments.

But Waller cautioned that "one report does not make a trend," and it remains too early to conclude that prices are heading sustainably down.

"More interest rate hikes are needed to get inflation down," he said in the speech prepared for delivery to a conference in Phoenix, Arizona.

While inflation remains well above the Fed's two percent target, there has been a growing number of voices advocating for smaller steps in the coming months.

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