O Director of the Fed (Federal Reserve, the North American central bank) Christopher Waller admitted that he thought about supporting a cut in interest rates at the March meeting of the American Central Bank, after the weak February payroll, but considered that inflation was once again “a bigger concern”, given the biggest inflationary pressures arising from the closure of the Strait of Hormuz.
“If the price of oil remains high for months at a time, at some point this will affect . A high and persistent oil shock cannot be ignored by the Fed and will not have a transitory impact on inflation,” said Waller in an interview with CNBC this Friday (20).
He also stated that he believes that, if the effects of the tariffs do not diminish by the second half of this year, the situation “will become complicated.”
He highlighted, however, that the markets did not show any sign of unanchoring expectations and that, once the impact of tariffs has been overcome, inflation should cool down. “The Fed is making progress in controlling inflation, which may be close to 2% now, but is maintained at a higher level by tariffs”, he pondered.
For Waller, the current scenario justifies greater caution – which, according to him, does not necessarily mean maintaining prices for the rest of the year.
“I can return to defending later this year, if employment is weak”, detailed the Fed director, adding that he sees no need to consider an interest rate hike.
