Federal Reserve Speeches·Sep 3, 2026, 8:30 AM ET

Waller, The Economic Outlook and Some Comments on My Policy Communication

Real GDP grew at a 1.8 percent annual rate in the first half of 2026, driven by solid consumer spending & strong business investment.
Data center plans & AI-related technological upgrades are fueling rapid growth in high-tech investment & software spending.
The labor market remains stable with average monthly job creation of 60,000 through July & an unemployment rate of 4.1 percent.
Inflation remains above the 2 percent goal, with 12-month core PCE at 3.3 percent, though three-month core inflation has declined steadily from 4.76 percent in February.
Nonmarket services prices are identified as a key factor in recent core inflation, with an upcoming measurement correction expected to lower reported PCE inflation.
Upside risks to inflation include potential tariff increases, higher energy prices, & technology goods price pressures from the AI buildout.
The speaker is inclined to support holding the federal funds rate steady if August data confirms continued disinflation.
A rate hike may be considered at the September 15-16 FOMC meeting if inflation data indicates progress toward the 2 percent goal has reversed.
The speaker emphasizes communicating a conditional "reaction function" to markets rather than providing rigid forward guidance, as the policy rate is not at the effective lower bound.
Future policy decisions will be heavily influenced by incoming August inflation readings, with the speaker willing to adjust the policy stance to ensure inflation resumes its downward trajectory.