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Rate hike risk at the Federal Reserve has not expired.
Governor Christopher Waller warned that further increases remain possible and offered a reason that goes beyond the familiar tariff-plus-energy explanation: inflation has broadened into areas that a simple reversal of energy prices would not fix.
Waller framed the risk as the Fed needing to avoid the mistake of applying last cycle's framework to this cycle's problem.
The broadening problem Waller made his point with a phrase that carries specific weight in central banking. The Fed, he argued, should not "fight the last war" on inflation.
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