“I do not support the Fed to change its monetary policy stance due to concerns about failed management at several banks,” said Fed Board Member Christopher Waller.
Fed Board Member Christopher Waller made statements about the possible impact of the banking crisis on interest rate hikes at an event organized by Norges Bank and the International Monetary Fund (IMF) in Oslo.
“I do not support the Fed’s change of monetary policy stance due to the concerns of failed management seen in a few banks,” said Waller, who said the Fed should raise interest rates to fight inflation as part of its dual obligations.
On the other hand, Waller said it was “not clear” that the recent banking sector woes will lead to significantly tighter lending conditions in the US.
In his May 24 assessment, Waller said he wanted to learn more about how bank woes earlier this year could contribute to a credit pullback that could slow growth.
Waller noted last Friday that the Fed has separate and targeted tools to ensure financial stability.
Fed keeps interest rates steady after 15 months
After 15 months of tightening, the Fed decided to keep the policy rate constant at the 5-5.25 percent band after the meeting held on June 14.
In the decision text, the authorities updated their interest rate expectations for 2023 upwards, and made upward revisions in the economic projections on the growth and inflation side. On the other hand, the expectations reflected on the dot chart also indicated that interest rate hikes are on the table in the upcoming period. Fed officials’ interest rate expectation for the end of the year was determined as 5.6 percent. In the previous estimate, this was recorded as 5.1 percent.