Fed Member Waller's Interest Rate Warning: Treasury Yields Rise

Federal Reserve Board Governor Christopher Waller stated that a 50 basis point rate hike could be on the table in December if the inflation outlook deteriorates. Waller's remark was interpreted as a signal of a tighter stance in monetary policy. Following the statement, US Treasury yields moved upward. The increase in Treasury yields was assessed as investors strengthening their expectations for rate hikes. Market participants perceived Waller's comments as a message that the Fed remains committed to fighting inflation. Strengthening rate hike expectations created selling pressure in the bond market. Waller's remarks increased uncertainty about the direction of monetary policy ahead of the Fed's December meeting. Investors are closely monitoring upcoming data and other statements from Fed officials. Not investment advice.