Federal Reserve Governor Christopher Waller indicated that, given the stability of the U.S. labor market, high inflation has become the biggest risk. Speaking at an economic conference in Rome, he noted that a year ago he supported rate cuts due to labor market deterioration and was willing to tolerate delays in achieving the inflation target, but now the risks have reversed. With the labor market stable while inflation is rising, his thinking on monetary policy has changed. The June employment report showed the unemployment rate fell to 4.2 percent, though Waller did not mention it. Ahead of the next FOMC meeting, attention may increasingly focus on the June consumer price index.