Fed Governor Waller says a half-point December hike should be considered, the largest since 2022
Treasury yields rose after Waller backed at least a quarter-point increase and ruled out using the Fed’s balance sheet to fight inflation.
Federal Reserve Governor Christopher Waller said on Tuesday that he backs a rate increase in December and that a half-point move should be considered6. He plans to support at least a quarter-point increase at that meeting7.
A half-point increase would be the largest Fed rate rise since 20221. Waller tied the case for a big increase to inflation remaining stubborn2.
He delivered the remarks in a speech on the economic outlook, opening by welcoming “Bank of England watchers, who I suspect are watching the Federal Reserve as well”4.
Waller also dismissed the option of using the Fed’s $6.75 trillion balance sheet to tame inflation, a position that differs from that of Chairman Kevin Warsh2,5. He questioned whether a “stable” US labour market is a “healthy” one5.
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Why it matters to investors
Bond markets reacted quickly. Treasury yields moved higher on Tuesday after Waller’s comments boosted market expectations for an interest-rate hike in December, while eurozone bond yields fell3.
The remarks show a split inside the Fed over how hard to lean against inflation. Two policymakers, Cleveland Fed President Beth Hammack and Governor Lisa Cook, dissented in favour of a 25-basis-point increase1,6. Waller’s willingness to consider twice that amount places him at the more aggressive end of the debate1,6.
There is also a split over tools. Waller rejected the balance sheet as an inflation-fighting instrument, while Warsh has taken a different view of its role2. The difference bears on whether the Fed’s $6.75 trillion balance sheet becomes part of the response to inflation2,5.
Waller’s doubts about the labour market add a further angle: a market that looks stable on the surface may not be healthy, in his view, which complicates the trade-off between fighting inflation and supporting jobs5.
What to watch
The size of the December move is now the main question, with at least a quarter point backed by Waller and a half point on the table6,7.
Other Fed officials are due to speak in the run-up to the meeting. New York Federal Reserve President John Williams speaks to the Economic Club of New York7.
Investors will also watch whether the leadership adopts Waller’s view of the balance sheet or keeps the approach favoured by Warsh2,5.
Movements in Treasury yields after each speech will show how far markets are pricing a larger increase3.
Sources
- Top Federal Reserve official considers largest rate rise since 2022 - Financial Times, ft.com (2026-11-10)
- Fed’s Waller Backs Big Rate Increase if Inflation Remains Stubborn - Barron’s, barrons.com (2026-11-10)
- Treasury Yields Turn Higher on Fed’s Waller Comments; Eurozone Bond Yields Fall, wsj.com (2026-11-10)
- Speech by Governor Waller on the economic outlook - Federal Reserve Board, federalreserve.gov (2026-11-10)
- Waller rules out using balance sheet as he floats 50bp hike - Central Banking, centralbanking.com (2026-11-10)
- Fed’s Waller backs a December rate hike and says a half-point move should be considered ..., mlq.ai (2026-11-10)
- Fed’s Waller plans to support at least a quarter-point rate hike in December, thestandard.com.hk (2026-11-10)
Assembled by Edwin, my AI assistant powered by Claude, from the public excerpts of the outlets numbered above. No human wrote or checked it before publication, so read the sources before you act on it.
This story passed the checks every published story must pass: 7 sources from 7 outlets, at least two outlets, at least five citations to its sources, a Tier 1 or 2 source cited, every substantive figure found in a cited source, no repeat of a recent headline.