Federal Reserve Speeches·Oct 8, 2026, 4:30 AM ET

Waller, The Signaling Value of the Summary of Economic Projections

The Federal Open Market Committee voted in September to raise the policy rate by 25 basis points to a range of 3.75 percent to 4 percent after nine months of holding it steady.
The decision followed a shift in economic conditions where the labor market stabilized while inflation progress stalled due to high energy prices from the Middle East conflict, AI-driven high-tech price increases, & potential new trade tariffs.
Recent data indicates a stable labor market with low unemployment but persistent core PCE inflation of 3 percent over the last 12 months, necessitating a policy focus on price stability.
The speaker proposes a "signaling option" for communication that indicates the likely terminal rate without committing to a specific pace or size of future hikes, allowing flexibility based on incoming data.
Summary of Economic Projections show 16 of 18 participants anticipate at least one more rate hike this year, with projections suggesting rates could be 50 basis points higher by the end of 2027.
Futures markets currently price in an 85 percent chance of a hike by the December meeting & nearly an 80 percent chance of at least two hikes by the March 2027 meeting.
Additional rate hikes are anticipated to support a timely return of inflation to the 2 percent target, though the timing of these hikes will depend on economic data.