Fed Governor Christopher Waller said he's willing to consider what would be the most aggressive rate hike in decades at the central bank's July meeting.
, or 100 basis point, increase in the Fed's benchmark short-term borrowing rate. The probability for that outcome stood at nearly 80% Thursday morning, according to CME Group data.
If the Fed would go the 100 basis point route, it would mark the biggest one-month increase since the early 1980s when the central bank was trying to control runaway inflation. Getting prices down is the paramount mission of the Fed now, said Waller, who expects still more rate hikes even after this month's.
"I think we need to move swiftly and decisively to get inflation falling in a sustained way, and then consider what further tightening will be needed to achieve our dual mandate," he said.Worries are mounting that the U.S. is headed for or already in a recession, but Waller said the strength of the jobs market has him "feeling fairly confident that the U.S. economy did not enter a recession in the first half of 2022 and that the economic expansion will continue.
Even with the Fed tightening, he said he thinks the economy can achieve a "soft landing" that won't include a recession. U.S. GDP contracted 1.6% in the first quarter, and the Atlanta Fed's GDPNow tracker is indicating a 1.2% decline in Q2, meeting the rule-of-thumb definition of a recession.
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