WASHINGTON (AP) — Christopher Waller, a member of the Federal Reserve’s Board of Governors, said Thursday that he would be open to supporting a huge 1 percentage point increase in the Fed’s key short-term interest rate later this month if upcoming economic data points to robust consumer spending.

Such an increase would mark a further ramping up of the Fed’s rate hikes as it intensifies its fight against accelerating inflation. Faster rate increases would heighten the risk that the central bank’s anti-inflationary policies would cause a recession. The Fed hasn’t raised its rate by 1 percentage point in several decades.

In a speech in Victor, Idaho, Waller said he still supports a 0.75% point increase at the central bank’s next policymaking meeting in two weeks, even after a government report Wednesday showed consumer inflation accelerating to a new 40-year high.

But further economic data — including a report Friday on June retail sales and several reports on home sales and prices — will be released before the Fed’s next meeting. If those figures “come in materially stronger than expected,” Waller said Thursday, “it would make me lean towards a larger hike.”

Wednesday’s inflation report showed that prices spiked 9.1% in June from 12 months earlier, the biggest such increase since 1981. Though much of the inflation was driven by higher costs for food and gas, price increases were widespread and in many cases accelerating in such areas as rents, restaurant meals, and medical services.

Speaking during a question-and-answer session, Waller suggested that a 1-point rate increase at the Fed’s meeting late this month is less likely than the 80% probability that financial markets had given it late Wednesday, according to the CME Group.

“The markets may have gotten ahead of themselves a little bit yesterday,” he said.

As of Thursday, traders had swung back to regarding a three-quarter-point Fed rate increase as more likely than a full-point hike.

Waller stressed, though, that Wednesday’s worrisome consumer inflation report sealed the case for a three-quarter-point hike, rather than the half-point increase that Chair Jerome Powell had suggested was also on the table for the Fed’s upcoming meeting.

On Wednesday, after the inflation figures were released, Raphael Bostic, president of the Federal Reserve Bank of Atlanta, suggested that “everything is in play” at the July meeting — including a potential 1 point rate hike.

In an interview on Bloomberg TV on Wednesday evening, Loretta Mester, head of the Cleveland Fed, declined to say what size rate hike might be considered. But she said the consumer inflation report “was uniformly bad — there was no good news in that report at all.”

In his remarks Thursday, Waller discounted concerns that the economy might be nearing a recession. He pointed to healthy job gains this year and an unemployment rate that is near a half-century low.

Those job gains, he said, “leave me feeling fairly confident that the U.S. economy did not enter a recession in the first half of 2022 and that the economic expansion will continue.”

As a result, a “soft landing” in which the economy grows at a slower pace, bringing inflation toward the Fed’s 2% target, “is very plausible.”

With the economy still growing, the Fed must focus on inflation, Waller added. Wednesday’s inflation report “was a major league disappointment.”

“No matter how you look at the data, inflation is far too high, and my job is to move it down toward our 2% target,” he said.

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