Washington DC [US], November 10 : US Federal Reserve Governor Christopher J. Waller on Tuesday signalled support for a 25-basis-point interest rate hike at the Federal Open Market Committee's (FOMC) December meeting, while indicating that a larger 50-basis-point increase could be considered if October inflation remains elevated.
Speaking at the Bank of England Watchers Conference in London, Waller said he would support a rate hike even if inflation improves in October. 
"While I am hoping for an improvement over September, even if this occurs, I would still support a 25 basis point increase in the FOMC's policy rate at our December meeting. However, if inflation comes in substantially higher than I expect, more robust action by the FOMC may be called for," he said. 
Waller said the US economy continues to expand strongly, with employment remaining close to its long-term level. However, he cautioned that inflation remains a major concern for monetary policymakers.
"I believe further tightening of monetary policy will be needed, sooner rather than later, to return inflation to a path that will reach 2 percent in the medium term," he noted. 
Waller noted that the central bank's communication about possible monetary tightening had already prompted financial markets to price in future rate increases.
He further stressed, "When this communication is clear and credible, what really matters is that those hikes are eventually carried out—it is not necessary, for example, to raise rates at consecutive meetings."
Waller highlighted that US real gross domestic product (GDP) expanded by an estimated 3.4 per cent in the third quarter of 2026, supported by strong consumer spending and robust business investment. 
However, the policy maker expects economic growth to moderate somewhat during the fourth quarter as consumer spending slows to levels more consistent with household income and wealth.
Despite the expected moderation, he maintained that US economic output would continue expanding at a solid pace.
"I am leaning toward supporting an increase in our policy rate of 25 basis points at the FOMC's December meeting," he said. 
However, he warned that stronger action could become necessary if October inflation remains elevated.
"In that case, I believe a 50 basis point hike in the policy rate should be considered at the December meeting. Hiking only 25 basis points would put our credibility at risk, a risk I am not eager to take," he said.
The US Bureau of Labor Statistics (BLS) is scheduled to release the Consumer Price Index (CPI) data for October 2026 later today at 8:30 a.m. Eastern Time (7:00 p.m. IST).