09:18 AM EDT, 05/21/2024 (MT Newswires) -- While there has been progress on inflation recently, including the softer-than-expected April inflation data, there needs to be more evidence of a slowdown before the Federal Open Market Committee can consider easing policy, Federal Reserve Governor Christopher Waller said Tuesday in prepared remarks to the Peterson Institute for International Economics.

"The latest CPI data was a reassuring signal that inflation is not accelerating and data on spending and the labor market suggest to me that monetary policy is at an appropriate setting to put downward pressure on inflation," Waller said. "While the April inflation data represents progress, the amount of progress was small, reflected in the fact that I needed to report the monthly numbers to two decimal places to show progress."

Market participants saw that consumer price data, the first favorable reading this year, as a sign that the policy setting Federal Open Market Committee could begin lowering interest rates as soon as the September meeting.

However, Waller suggested this is just the start of a string of data the FOMC needs to see, and that the April report would only get a C+ as a grade for how inflation is progressing.

"The economy now seems to be evolving closer to what the Committee expected," Waller said "Nevertheless, in the absence of a significant weakening in the labor market, I need to see several more months of good inflation data before I would be comfortable supporting an easing in the stance of monetary policy."

Waller would not specify what the term "good data" means but suggested that inflation progress needs to be more obvious than seen recently.