{"id":71362,"date":"2026-09-03T09:08:14","date_gmt":"2026-09-03T13:08:14","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/feds-waller-signals-potential-rate-hold-amid-signs-of-disinflation\/71362\/"},"modified":"2026-09-03T09:08:14","modified_gmt":"2026-09-03T13:08:14","slug":"feds-waller-signals-potential-rate-hold-amid-signs-of-disinflation","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/feds-waller-signals-potential-rate-hold-amid-signs-of-disinflation\/71362\/","title":{"rendered":"Fed\u2019s Waller Signals Potential Rate Hold Amid Signs of Disinflation"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>Federal Reserve Governor Christopher Waller<\/strong> signaled a preference for holding interest rates steady at the <strong>September 15-16<\/strong> meeting, provided upcoming inflation data continues to show progress toward the <strong>2% target<\/strong>.<\/li>\n<li><strong>The Japanese Yen<\/strong> surged as much as <strong>2% against the U.S. Dollar<\/strong>, reaching its strongest level since early August amid speculation of a more aggressive <strong>Bank of Japan<\/strong> rate hike trajectory.<\/li>\n<li><strong>U.S. Labor Productivity<\/strong> for Q2 was confirmed at a <strong>1.4% annualized rate<\/strong>, while <strong>Unit Labor Costs<\/strong> were downwardly revised to a <strong>1.2% increase<\/strong>, suggesting easing inflationary pressures from the labor market.<\/li>\n<li><strong>AbbVie (<a href=\"\/stock\/ABBV\">ABBV<\/a>)<\/strong> reaffirmed its <strong>Q3 and full-year 2026 EPS guidance<\/strong> following the completion of its <strong>$10.9 billion acquisition<\/strong> of <strong>Apogee Therapeutics<\/strong>.<\/li>\n<li><strong>Saudi AI firm HUMAIN<\/strong> is reportedly seeking to raise a <strong>$2.5 billion fund<\/strong> to expand its data center footprint, part of a broader push to establish the Kingdom as a global hub for AI infrastructure.<\/li>\n<\/ul>\n<h2>Waller Urges Patience as Disinflation Takes Root<\/h2>\n<p>Federal Reserve Governor <strong>Christopher Waller<\/strong> stated on Thursday that he is &quot;finally seeing some signs of disinflation&quot; in recent economic data. Speaking at a <strong>Reuters NEXT<\/strong> event, Waller indicated he would be inclined to support keeping the federal funds rate at its current <strong>3.50%\u20133.75%<\/strong> range during the September FOMC meeting if August inflation data remains favorable. He emphasized that the three-month core inflation rate, which fell to <strong>3.05%<\/strong> through July, is a more encouraging gauge than the lagging 12-month figures.<\/p>\n<p>Despite the dovish lean, Waller maintained that policy remains only &quot;slightly restricting&quot; and warned that he would consider a <strong>September rate hike<\/strong> if August&#39;s data shows progress has reversed. He noted that while <strong>GDP growth<\/strong> continues at a &quot;solid&quot; pace\u2014rising <strong>1.8%<\/strong> in the first half of the year\u2014the Fed must remain vigilant as inflation remains meaningfully above its long-term goal. Waller also highlighted that <strong>AI investment<\/strong> is a &quot;legitimate&quot; contributor to GDP and is expected to reliably boost future productivity.<\/p>\n<h2>Markets React to Labor Data and Currency Volatility<\/h2>\n<p>U.S. labor market data released Thursday showed <strong>initial jobless claims<\/strong> rose slightly to <strong>206,000<\/strong> for the week ending August 29, marginally above the expected <strong>205,000<\/strong>. Meanwhile, revised figures for the second quarter showed <strong>nonfarm productivity<\/strong> grew at a <strong>1.4%<\/strong> rate, while <strong>unit labor costs<\/strong> increased by just <strong>1.2%<\/strong>, down from the previous estimate of <strong>1.3%<\/strong>. These figures suggest that businesses are managing labor costs effectively, providing the Fed with more breathing room regarding interest rate decisions.<\/p>\n<p>In currency markets, the <strong>Japanese Yen<\/strong> saw a dramatic appreciation, extending gains to <strong>2%<\/strong> against the dollar. The move was fueled by hawkish comments from <strong>Bank of Japan<\/strong> officials and rumors of potential currency intervention to stabilize the yen. This surge pressured the <strong>U.S. Dollar Index<\/strong>, which fell to <strong>99.25<\/strong> as traders pared back bets on further Fed tightening following Waller&#39;s remarks.<\/p>\n<h2>Corporate Developments: AbbVie and Saudi AI Ambitions<\/h2>\n<p>Pharmaceutical giant <strong>AbbVie (<a href=\"\/stock\/ABBV\">ABBV<\/a>)<\/strong> confirmed it is sticking to its 2026 financial outlook, reaffirming adjusted diluted EPS guidance of <strong>$13.87\u2013$14.07<\/strong> for the full year. The company also completed its <strong>$10.9 billion<\/strong> acquisition of <strong>Apogee Therapeutics<\/strong>, a move intended to bolster its immunology pipeline with late-stage assets like <strong>zumilokibart<\/strong>. While the deal is expected to be <strong>$0.14<\/strong> dilutive to 2026 EPS, management noted that strong operational performance has partially offset the impact.<\/p>\n<p>In the technology sector, Saudi Arabian AI firm <strong>HUMAIN<\/strong> is moving forward with plans for a <strong>$2.5 billion<\/strong> data center fund. This follows the announcement of a strategic partnership with <strong>Together AI<\/strong> and the live deployment of <strong><a href=\"https:\/\/stockmarketwatch.com\/stock\/AMD\" data-internallinksmanager029f6b8e52c=\"16\" title=\"stock: AMD\">AMD<\/a> (<a href=\"\/stock\/AMD\">AMD<\/a>)<\/strong> and <strong>Cisco (<a href=\"\/stock\/CSCO\">CSCO<\/a>)<\/strong> powered infrastructure in the Kingdom. The firm aims to deploy up to <strong>1 GW<\/strong> of AI infrastructure by 2030, positioning Saudi Arabia as a major exporter of computing power.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Federal Reserve Governor Christopher Waller signaled a preference for holding interest rates steady at the September 15-16 meeting, 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