Waller Says August CPI Is Key to a Rate Decision

• Fed Governor Chris Waller's future interest rate decision is 'heavily influenced' by August CPI data.
• Waller is open to holding policy rates if disinflation continues, but would consider a hike if inflation 'comes in hot'.
• Current Fed policy is assessed as only 'slightly restricting demand', indicating a potential need for further tightening.
• The market interpreted Waller's comments as dovish, leading to a rise in treasuries.

Federal Reserve Governor Chris Waller stated that his next interest rate decision will be 'heavily influenced' by upcoming August inflation data. He indicated a willingness to support holding policy rates if disinflation continues, but would consider a rate hike if inflation comes in hot, emphasizing the data-dependent nature of the Fed's approach. The market reacted with rising treasuries, interpreting his comments as slightly dovish.