(Reuters) - The U.S. Federal Reserve should be prepared to raise interest rates by a half percentage point at every meeting from now on until inflation is decisively curbed, Fed Governor Christopher Waller said on Monday, underscoring tensions at the central bank about how aggressively to tighten policy as it battles to bring down high inflation.
"I am advocating 50 (basis point hikes) on the table every meeting until we see substantial reductions in inflation. Until we get that, I don't see the point of stopping," Waller said following a speech to the Institute for Monetary and Financial Stability in Frankfurt, Germany, having earlier confirmed he wants that size of rate hike at the next "several" meetings.
Waller's comments came ahead of a meeting on Tuesday between Fed Chair Jerome Powell and U.S. President Joe Biden for a discussion called by the White House on state of the American and global economy.
The Fed is under pressure to decisively make a dent in an inflation rate that is running more than three times its 2% goal and has caused a jump in the cost of living for Americans. It faces a difficult task in dampening demand in the economy enough to curb inflation while not causing a recession.
Biden's public approval rating fell this week to 36%, the lowest level of his presidency, as Americans suffered from high inflation, according to a Reuters/Ipsos opinion poll last week, raising alarms that his Democratic Party is on track to lose control of at least one chamber of Congress in the Nov. 8 midterm election.
Fed policymakers raised the benchmark policy rate by half a percentage point earlier this month, to a target range of between 0.75% and 1%, and plans further increases of the same size at its next two meetings in June and July.
Debate at the Fed has shifted to the interest rate hikes required for the remainder of the year. Most policymakers have said they want to wait and see how much inflation comes down over the summer before deciding whether they need to increase or reduce the size of an interest rate hike in September.
By Tom Sims
