The Fed Will Raise Rates After Digesting The Latest Data?

<p>&nbsp;Federal Reserve Governor Christopher Waller said on Tuesday that the latest economic data gave the US central bank room to see if it would be necessary to raise interest rates again, while at the same time he noted that he did not currently see any which will force the Fed to raise short-term borrowing costs again.</p><p><br /></p><p>On Friday, the US Labor Department reported that the economy continued to add jobs at a strong rate in August, although the unemployment rate rose to 3.8% from 3.5% in July.</p><p><br /></p><p>In recent days, Fed officials have said that while inflation is still too high, it has started to come down, and they have said that any move to increase the benchmark overnight interest rate range depends on data. The Fed was last seen raising rates in late July, pushing its policy rate into the 5.25%-5.50% range. The rate has been raised from near zero since March 2022.</p><p><br /></p><p><br /></p><p>Financial markets believe that rate hikes by the Fed are over. But Waller cautioned against making such assumptions, noting that the Fed has been fooled by data that appeared to show an uptick in inflation only to see price pressures stronger than expected.</p><p><br /></p><p>Whether interest rates will rise further “depends on the data. I think we have to wait and see if this inflationary trend continues or not," said Waller.</p><p><br /></p><p>Waller also noted that another rate hike, if needed, would not cause much of an impact on the labor market. Although the unemployment rate has risen and there is evidence of a weak job market, hiring remains historically strong.</p><p><br /></p><p>Waller also said the Fed is watching the commercial real estate sector for risks amid changes in the way office workers spend their time, but he said he doesn't see much evidence that challenges in the sector could damage the economy as a whole.</p>