Fed's Waller says more rate hikes are needed but need not come at consecutive meetings, October 8, 2026

Federal Reserve Governor Christopher Waller said on Thursday, October 8, 2026 that he expects the Fed to raise interest rates again if the economic data come in as expected, and that the increases need not come at back-to-back meetings. "The hikes do not need to come at consecutive meetings," he said in prepared remarks for the Istanbul Economic Forum of Turkey's central bank, released at 4:30 a.m. ET. The first headlines reached the MoveSurge news feed at 08:30:00 UTC. Ten minutes later the euro was 0.087% lower at $1.11866, down from $1.11963, and gold was 0.106% lower at $4,148.00, from $4,152.40.

What Waller said

• He anticipates additional rate increases to bring inflation back to the 2% goal sooner, provided the data arrive as expected.
• There is some flexibility about when those increases happen, so they need not come at consecutive meetings.
• Inflation has been above target for what will soon be five and a half years, and the AI investment boom and the energy shock are among several persistent inflationary forces. He said oil prices could stay high through 2027.
• The labor market was "solid and stable" in September even though fewer jobs were created.

The Fed raised its target range by a quarter point to 3.75% to 4.00% on September 16, its first increase since July 2023, on a 12-to-0 vote. Minutes of that meeting, released on October 7, showed that most officials thought another increase would likely be appropriate by the end of the year, without saying when.

Why the dollar barely moved

Waller's message matched what rate futures already priced. After the weak September jobs report, CME FedWatch put the chance of an increase at the October 27 and 28 meeting at about 17%, and Reuters reported that recent comments from Fed officials pointed to a pause in October and a likely increase in December. The line about consecutive meetings fits that path, and the moves stayed close to a tenth of a percent. The chart above, built from one-minute bars, has EUR/USD at $1.11944 one minute after the release, down 0.017%, and at $1.11879 after fifteen minutes, down 0.075%; our ten-minute reaction reading is the 0.087% fall quoted above. The 10-year Treasury note contract we track fell 0.06% in price over the same ten minutes, which means a slightly higher yield, and the yen was flat.

Rates rose further later in the morning. CNBC reported the 10-year Treasury yield at 5.322%, up about four basis points, and the 30-year at 5.705%, just under a 24-year high, ahead of that afternoon's 30-year bond auction.

How Waller's view changed in 2026

1. January: dissented in favour of a quarter-point cut, alongside Governor Stephen Miran.
2. March 18: voted to keep rates unchanged.
3. July 13: said AI demand was a new inflationary force but that the Fed "should not be fighting the last war," while warning that another hot core inflation reading would put tightening on the table.
4. July 29: voted to hold at 3.50% to 3.75% while three regional presidents dissented in favour of a hike.
5. September 3: said he was inclined to support holding rates at the September meeting.
6. September 16: voted for the quarter-point increase with the rest of the committee.
7. October 8: said he anticipates further increases, without a fixed schedule.

A governor who wanted a cut in January now expects further increases, and he ties that to how long inflation has stayed above target.

The inflation he is responding to

The personal consumption expenditures price index, the Fed's preferred gauge, rose 3.4% in the year to August, with core prices up 3.0%, the Commerce Department reported on September 30; both were lighter than economists expected. Consumer prices rose 3.4% over the same period. The labor market has cooled: payrolls grew by 29,000 in September against forecasts of 84,000, and unemployment rose to 4.2%. September's consumer price index is due on October 14, two weeks before the Fed's next decision.