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(Bloomberg) — Federal Reserve Governor Christopher Waller said he’s inclined to vote for another reduction in interest rates when officials meet later this month, though data due before then could make the case for holding them steady. 

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“At present I lean toward supporting a cut to the policy rate at our December meeting,” Waller said in prepared remarks at a conference on the Fed’s framework review in Washington sponsored by the American Institute for Economic Research. “But that decision will depend on whether data that we will receive before then surprises to the upside and alters my forecast for the path of inflation.” 

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Waller said recent data had raised concerns that inflation may be stalling above the 2% target but added “there is no indication” that prices in key service categories should remain at their current levels or increase. 

“I believe the evidence is strong that policy continues to be significantly restrictive and that cutting again will only mean that we aren’t pressing on the brake pedal quite as hard,” Waller said in the text of his remarks. “Another factor that supports a further rate cut is that the labor market appears to finally be in balance, and we should aim to keep it that way.”

Waller didn’t discuss the framework review in the text of his remarks.

Fed officials started cutting rates in September after pushing them to a peak of 5.25% to 5.5%, which helped cool inflation pressures off a peak of 7.2% in mid-2022.

But investors in December futures contracts are pricing in some chance of a pause in the cutting cycle after recent data showed sticky service-sector inflation. The personal consumption expenditures price index, minus food and energy, rose 2.8% for the 12-month period ending in October.

While officials call their policy “restrictive,” US gross domestic product expanded at an annualized rate of 2.8% in the most recent quarter. Personal spending has remained strong along with equipment spending by businesses.

Chair Jerome Powell has been attentive to the risk of labor market weakening, but getting a clean read on the data has been challenging because of strikes and storms. The Bureau of Labor Statistics will release its payrolls report for November on Friday. The next Federal Open Market Committee meeting will be held Dec. 17-18 in Washington.

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