Federal Reserve Governor Christopher Waller said he favored more monetary policy tightening to reduce persistently high inflation, although he said he was prepared to adjust his stance if needed if credit tightens more than expected.

“Because financial conditions have not significantly tightened, the labor market continues to be strong and quite tight, and inflation is far above target, so monetary policy needs to be tightened further,” Waller said Friday in a speech in San Antonio, Texas. “How much further will depend on incoming data on inflation, the real economy, and the extent of tightening credit conditions.”

Policymakers have penciled in one additional quarter-point hike this year, and markets are pricing in the likelihood of a final rate increase on May 3. While inflation reports this week have shown some signs of easing price pressures, most Fed officials who have spoken have highlighted the need to do more to return price gains to their 2% target.

“I would welcome signs of moderating demand, but until they appear and I see inflation moving meaningfully and persistently down toward our 2% target, I believe there is still work to do,” Waller said.

In separate remarks Friday, Chicago Fed President Austan Goolsbee said central bank officials shouldn’t be too aggressive with further rate hikes in the wake of recent stress in the banking sector, though he said he wants to see more data before deciding what action he would support at the Fed’s next meeting.

“Let’s just be mindful that we’ve raised a lot, it takes time for that to work its way through the system,” he said in an interview with CNBC.

Meanwhile, Atlanta Fed President Raphael Bostic said he favored one more rate increase that would ensure that inflation is on a path to the Fed’s 2% goal, followed by a pause.

Recent inflation data “are consistent with us moving one more time,” Bostic told Reuters in an interview on Thursday. “We’ve got a lot of momentum suggesting that we’re on the path to 2%.”

By contrast, Waller said he took no comfort in this week’s consumer price report showing inflation dropping to 5% as he focused on core inflation, excluding food and energy, which has shown little progress.

“I interpret these data as indicating that we haven’t made much progress on our inflation goal, which leaves me at about the same place on the economic outlook that I was at the last FOMC meeting, and on the same path for monetary policy,” he said, referring to the policy-setting Federal Open Market Committee.

Fed officials lifted interest rates by a quarter percentage point last month, bringing their policy benchmark to a target range of 4.75% to 5%, up from near zero a year earlier.

A string of bank collapses last month has added new uncertainty to the outlook this year. Waller said he viewed bank stresses as easing, though he also said he wasn’t sure how much credit tightening would result from the troubles.

After data came in stronger than expected earlier this year, Waller said he thought the Fed would need to raise its target rate to 5.5% or higher. But the recent bank strains prompted him to dial those expectations back to where they were in December.

“Once the SVB situation happened, and credit conditions started to tighten, that takes some of the work off me,” he said during a question-and-answer session following the speech.

“This is kind of a silver lining in a bad cloud,” he added. “But we are going to let some of this tightening do the work for us so we potentially don’t have to raise rates quite as much as I thought we would have to back in February.”

The Fed governor repeated his view that monetary policy will need to remain tight “for a substantial period of time, and longer than markets anticipate,” but also cautioned uncertainty is high.

“There are still more than two weeks until the next FOMC meeting, and I stand ready to adjust my stance based on what we learn about the economy, including about lending conditions,” he said.

Waller’s prepared remarks were shared before release of Friday’s retail sales data, which showed sales fell for a second month in March, indicating household spending is cooling as Americans face high inflation and rising borrowing costs.

Waller’s comments come amid some increasing signs of differences of opinion by policymakers, and as the central bank’s staff forecast a mild recession in March, according to minutes released of the last meeting, with bank failures contributing to a credit tightening. San Francisco Fed President Mary Daly said this week the economy may be able to slow enough on its own to return inflation to the Fed’s 2% target.

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