US Federal Reserve Governor Christopher Waller stated on Monday that high inflation is the primary risk facing the Fed, given a labor market that remains stable. Waller’s comments were made at an economics conference in Rome, where he noted that the labor market has flipped from a year ago, when he was advocating for rate cuts due to a struggling labor market.

Inflation Concerns

Waller’s comments put added focus on inflation data scheduled to be released on July 14 on consumer prices through June, a key final data point before the Fed’s July 28 to 29 meeting. Global oil prices that have fallen back to around $70 a barrel could help ease headline inflation. However, Fed policymakers still feel that their preferred measure of inflation would be more than a percentage point above the central bank’s 2% target at year end.

Investors currently expect rates to rise by the Fed’s September meeting, with odds of a July rate hike at about one in four. According to Tim Duy, chief US economist for SGH Macro Advisors, a rate hike is on the table when policymakers gather for the July meeting, given relatively low unemployment and inflation stuck above target.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.