US Federal Reserve Governor Chris Waller on Friday added his voice to a growing bloc of policymakers calling for the US central bank to indicate that its next move could be an interest rate hike.
The world's largest economy has been battling stubbornly high prices since the pandemic, with consumer inflation coming in at a three-year high in April.
The price increases have been exacerbated by US President Donald Trump's war on Iran, which has sent global energy prices surging after Tehran virtually blocked a fifth of the world's oil and gas supplies.
"Inflation is not headed in the right direction," Waller said in a lecture in Frankfurt on Friday.
"Based on this recent data, I would support removing the 'easing bias' language in our policy statement to make it clear that a rate cut is no more likely in the future than a rate increase."
He added, however, that this did not mean he expected rate increases "in the very near future." He said he expected to back a pause on interest rate changes "for the near term."
The Fed held rates steady at the last meeting of its Open Market Committee (FOMC) in late April, but there was an outpouring of dissent.
Three Fed regional presidents backed removing the easing bias language, while one governor backed an interest rate cut.
With Waller's comments on Friday, one-third of the 12-member rate-setting committee now backs the change in language.
Incoming Fed chair Kevin Warsh -- due to be sworn in on Friday -- has backed interest rate cuts in the past, and will face a divided committee when he chairs the next meeting in June.
Waller said he expected the path of inflation to be determined by the length of the war on Iran.
"It is time to simply sit and watch how the conflict and the data evolve," he said.
