Waller Keeps Half-Point Fed Hike on the Table for December

Federal Reserve Governor Chris Waller said on Tuesday that a half-point interest rate increase is now part of the conversation for the central bank's December meeting. He did not commit to a path. Instead, he tied the decision to the October consumer price index, the monthly inflation gauge published by the Labor Department. If prices rose faster than expected, a larger move becomes more likely.

The comment matters because a half-point increase is double the more typical quarter-point step. By keeping that option open, Waller signaled he is not ruling out tightening at a faster pace. Markets tend to watch remarks like this closely, since expectations for the policy rate feed into borrowing costs on mortgages, business loans and credit cards, and into the prices of stocks and bonds.

His remarks stopped short of a firm call, which leaves the October inflation report as the main swing factor. A cooler reading would make a smaller adjustment or a pause more plausible. A hotter one would strengthen the case for a bigger increase. Either way, the data released before the December meeting is likely to carry extra weight in the weeks ahead.