If you're waiting for the Fed to ease off rate hikes, don't hold your breath. Over the weekend, Federal Reserve Governor Christopher Waller said he would like to see another 0.75% interest rate increase at the next policy meeting in July. Waller also strongly supported the central bank's 0.75% rate hike last week, which was the largest rate increase since 1994.
Waller believes it should be no surprise that the Fed's benchmark interest rate would rise fast in 2022 as they aim to get the economy back on track, returning to its pre-pandemic strength. Federal policymakers said they wouldn't raise interest rates from near zero until these conditions were met, and their benchmark rate of interest was in a range of 1.5%-1.75% pre-pandemic in early 2020.
Most of the Federal Reserve Governors' remarks highlighted how the Fed might have been able to respond more quickly to a changing economy in 2021 if it had not made promises about low-interest rates after the pandemic-induced recession in 2020.