Federal Reserve Governor Christopher Waller stated Friday he favors a 25-basis level fee hike on the central financial institution’s subsequent financial coverage assembly Jan. 31-Feb. 1, and he expects to assist continued tightening of financial coverage to convey down inflation.

While financial progress seems to have slowed, the labor market nonetheless stays robust and tight, he stated in ready remarks for a speech to the Council on Foreign Relations. Real gross home product grew at an annual fee of three.2% in Q3 and month-to-month information “counsel it grew round 2% within the fourth quarter.” Meanwhile, the unemployment fee at December stood at 3.5%, matching the 50-year low reached earlier than the pandemic.

And whereas there was some encouraging information in current months, he is nonetheless cautious. Core CPI inflation ticked up in December, he identified, including that core inflation has “mainly moved sideways all 12 months.”

He’ll even be watching wage information. “Though current hourly earnings information are a constructive improvement, I have to see more proof of wage moderation to sustainable ranges,” Waller stated. “The Federal Reserve Bank of Atlanta’s Wage Growth Tracker has been working greater recently and has moderated much less.”

While watchful for warning indicators, he additionally hasn’t modified his thoughts {that a} “delicate touchdown” is feasible — “that it was fairly doable to make progress on inflation with out significantly damaging the labor market. So far, we’ve got managed to take action, and I stay optimistic that this progress can proceed.”

Earlier, Philadelphia Fed President Patrick Harker stated he expects 25-bp fee hikes could be acceptable going ahead and would anticipate a “few more” fee hikes.