Fed’s Waller: I am increasingly confident that policy is currently well positioned

While I am encouraged by the early signs of moderating economic activity in the fourth quarter based on the data in hand, inflation is still too high, and it is too early to say whether the slowing we are seeing will be sustained. 

I am increasingly confident that policy is currently well positioned to slow the economy and get inflation back to 2 percent. 

Data on economic activity in October indicate that consumer spending is cooling from its pace in the third quarter.

The labor market is also cooling off. Job creation is down this year from the high rates of 2022, and the unemployment rate has risen from a more than 50-year low of 3.4 percent in April to 3.9 percent in October.

These are all signs of a loosening labor market. But for all of the measures I have mentioned, they are still at levels that, historically, would be associated with a fairly tight labor market.

The October data I have cited on economic activity and inflation are consistent with the kind of moderating demand and easing price pressure that will help move inflation back to 2 percent, and I will be looking to see that confirmed in upcoming data releases. 

Before the next FOMC meeting we will get data on PCE inflation and job openings, and a job report and supply manager's survey for November.

All of that data will tell us whether inflation and aggregate demand are continuing to move in the right direction and inflation is on a path to our 2 percent goal.