Waller favors a December rate hike, with 50 basis points on the table if inflation stays hot
- Base case: +25 bps in December; he backed holding rates at the October meeting as markets had priced in tightening
- If October core CPI is around 0.3% month over month or higher, he says a 50-bp hike should be considered
- September PCE inflation: 3.7% year over year; core PCE: 3.1%; more than 70% of core services components rose over 3%
- GDP grew 3.4% in Q3; October unemployment was 4.1%, with payroll gains averaging about 80,000 monthly over six and 12 months
- Cites AI-related goods and energy costs as inflation risks; oil-price pass-through could persist into 2027