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Federal Reserve Governor Christopher Waller signaled Thursday that he would likely support keeping the federal funds rate unchanged at the September 15-16 policy meeting, assuming inflation figures continue to demonstrate movement toward the central bank’s 2% objective.
“Recent indicators suggest we are finally seeing some signs of disinflation.”
— Christopher Waller, Federal Reserve Governor
The Data: Signs of Cooling
Headline inflation was 3.7% in July, while core inflation stood at 3.3%. Based on the Fed’s preferred inflation measure, the three-month annualized rate has fallen from 4.76% in February to 3.05% recently.
While inflation remains above the Fed’s 2% target, the downward trend is giving policymakers reason to pause before raising rates further. Waller’s comments suggest the Fed is increasingly confident that inflation is moving in the right direction.
Market Reaction: Rebound and Relief
U.S. equities rebounded Thursday as technology stocks recovered, with the S&P 500 rising 0.5%, the Nasdaq 100 gaining 0.2%, and the Dow adding 0.6%.
Oil prices steadied near $90 a barrel, easing inflation concerns that had been driven by the ongoing Iran war and disruptions to shipping through the Strait of Hormuz. The stabilization in energy prices is a welcome sign for the Fed, which has been watching oil prices closely as a potential source of inflationary pressure.
Key Economic Data: Jobs Slowdown
The U.S. added just 38,000 private-sector jobs in August, the lowest since January, according to ADP data. The weak jobs count did little to cool expectations of a Fed hike, though Waller’s comments suggest the Fed may hold steady in September.
The slow job growth reflects a cooling labor market, which could give the Fed more confidence that the economy is not overheating. As the Fed weighs its decision, Waller’s comments signal that the balance of risks may be shifting toward holding rates steady.
Why It Matters to Urban Communities
For working families, the Fed’s rate decision will determine whether borrowing costs — for mortgages, auto loans, and credit cards — remain elevated or begin to ease. Waller’s signal that the Fed may hold rates steady offers a glimmer of hope for families struggling with high borrowing costs.
Higher interest rates have hit urban families hard:
- Mortgage rates have surged, making homeownership less affordable
- Auto loans have become more expensive, limiting access to transportation
- Credit card rates have climbed, increasing the burden of existing debt
- Small business borrowing has become more costly, constraining entrepreneurship
The Bottom Line
The Fed appears ready to pause rate hikes as inflation shows signs of cooling. Waller’s comments suggest the central bank is increasingly confident that its tightening cycle has been sufficient to bring inflation under control. Markets responded positively, with equities rebounding and oil prices steadying.
For working families, the message is clear: the worst may be behind us. But with inflation still above target and the labor market cooling, the Fed is likely to remain cautious. The September 15-16 meeting will be a critical test of whether the central bank is ready to hold steady — or if another hike is still on the table.
Sources
Investing.com: “USD/JPY extends gains after strong US data; Fed’s Waller signals hold in Sept” (September 3, 2026)
Business Standard: “Fed’s Waller says September rate hike unlikely as inflation cools” (September 3, 2026)
Bitcoin News: “U.S. adds 38,000 private-sector jobs in August, lowest since January: ADP” (September 3, 2026)
Firstpost: “Fed’s Waller: Holding rates in September is the right move” (September 3, 2026)
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