Skip to Content
Global News Select

Fed's Waller Says Inflation Jump Likely Temporary, Urges Patience

By Paul Kiernan 

WASHINGTON -- The U.S. economy is "going gangbusters," but the Federal Reserve needs to see several more months of data on jobs and inflation before determining when to begin scaling back its easy-money policies, a central banker said.

Over the past week, official data have shown April job creation falling far short of economists' forecasts, evidence of a shortage of available workers, and consumer prices rising much faster than expected, Fed governor Christopher Waller said Thursday. But he called for central bankers to remain patient.

"The May and June jobs report may reveal that April was an outlier, but we need to see that first before we start thinking about adjusting our policy stance," Mr. Waller said in a speech. "We also need to see if the unusually high price pressures we saw in the April CPI [consumer-price index] report will persist in the months ahead."

Since last year, the Fed has held interest rates near zero and purchased $120 billion of bonds each month to support the economy's recovery from the pandemic-induced recession. Most Fed officials said in March that they expected to leave rates on hold through 2023. Policy makers plan to continue the current rate of bond purchases until the economy makes "substantial further progress."

Data released Wednesday showed the consumer-price index surged 4.2% in April from a year earlier, prompting market participants to bet that the Fed will start raising rates sooner than officials expect.

Mr. Waller is among Fed officials who say the increase in inflation was likely driven by temporary factors related to the pandemic. While he said inflation will likely exceed 2% this year and next, it should return to the Fed's target after that.

"The takeaway is that we need to see several more months of data before we get a clear picture of whether we have made substantial progress towards our dual-mandate goals," Mr. Waller said, referring to the Fed's objectives of full employment and sustained 2% inflation.

Write to Paul Kiernan at


(END) Dow Jones Newswires

May 13, 2021 13:22 ET (17:22 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.