(Reuters) - Federal Reserve Governor Christopher Waller on Tuesday reiterated the U.S. central bank's determination to bring inflation down to its 2% target, but did not comment on the economic outlook or his view on the best immediate course for monetary policy.
"Price stability is a primary responsibility of the Federal Reserve," Waller said in remarks prepared for delivery to a conference at George Mason University's Mercatus Center in Virginia. "This is why we have taken forceful steps aimed at reducing inflation - and why we will stay on the job to achieve our objective."
Most of his comments focused on how monetary policy has changed since the 1970s, when the Fed is widely seen to have lost control over inflation, to the more recent period, when the central bank uses policy rules, including a widely cited one developed by Stanford Professor John Taylor, to inform its decisions on where to put short-term interest rates.
"In considering the appropriate monetary policy response needed to return inflation to 2 percent, I find it useful to draw on the findings of the policy rules literature," Waller said. "These findings include the 'Taylor principle' notion that deviations of inflation from target should likely be met by a more than one-for-one response of the federal funds rate - a response that helps ensure that the real interest rate is increased in policy tightenings."
Waller has been a forceful advocate of the Fed interest rate hikes that have brought the short-term policy rate to its current 5.25%-5.50% range. That's above the most recent six-month average of 3% growth in the core personal consumption expenditures price index.