Fed Waller leans toward holding rates in September

Federal Reserve Governor Christopher J. Waller said on 3 September 2026 that he would be inclined to support holding the federal funds rate at its current setting if incoming data keep showing disinflation. The remarks are his prepared speech, "The Economic Outlook and Some Comments on My Policy Communication," delivered at a Reuters NEXT Newsmaker Interview in Washington. The views are his own, not a Board or FOMC decision.

This is one governor explaining how he would vote if the next inflation prints look a certain way. The committee has not voted. Waller also said that if August data show the improvement was fleeting, it may be appropriate to raise the policy rate when the FOMC meets on September 15 and 16.

Inflation is still meaningfully above the FOMC's 2 percent goal. Headline PCE is up 3.7 percent over the past 12 months, and core PCE is 3.3 percent. Unemployment was 4.1 percent in July. The path most headlines skip is the three-month core reading: 3.05 percent through July, down steadily from 4.76 percent in February.

Real GDP grew at a 1.8 percent annual rate in the first half, and Waller expects a bit more than 2 percent for the year. Average job creation has run about 60,000 a month through July. He judges policy is currently only slightly restricting aggregate demand, so a hot August print could be enough for him to support a hike.

CNBC noted the remarks contrast with recent comments from Chairman Kevin Warsh, who said softer monthly readings do not tell him underlying trends have meaningfully improved. Market-implied odds of a September hike fell after Waller spoke, per CME FedWatch as cited by CNBC. That is colour on the tape, not a committee vote.

A hold-or-hike window is the near-term rate input for duration books already digesting Norway's planned Treasury cut. It is also the funding backdrop for a fintech that just got a conditional OCC national-bank letter, and for anyone marking the Treasury GENIUS Act stablecoin proposal or the SEC transfer-agent tokenization rules against a September path.

Before the September 15 and 16 meeting, CFOs, rates desks, and fintech treasuries should price both a hold and a small hike path off the August CPI and PCE prints. Waller's speech is one vote preference, not the committee decision.