Member of the Board of Governors of the United States Federal Reserve Christopher Waller stated on Wednesday, speaking at the 2023 Arkansas State University Agribusiness Conference, that the US economy will grow at a modest pace during 2023 “supported by a strong labor market and by encouraging progress in lowering inflation.”
Nonetheless, he underscored that inflation “remains quite elevated.” Waller said there are no signs inflation will decline quickly, adding that the Fed should brace “for a longer fight.” He explained that the central bank will have to keep a “tight [monetary policy] stance for some time” in order to slow activity further this year and bring supply and demand “into better alignment.”
Waller noted that interest rates might have to stay higher “for longer than some are currently expecting.” Talking about wage growth, the Fed official remarked that although some moderation was seen in recent months, this is “not enough.”