US Federal Reserve Governor Christopher Waller has said additional interest rate hikes will likely be needed to bring inflation back to the Fed's 2 per cent target, while keeping the door open for a pause this month.

"If the economic data continue to come in as expected, I anticipate additional hikes to support a timelier return of inflation to our 2% goal," Waller said in remarks prepared for a central banking forum in Istanbul.

"But there is some flexibility about when those hikes will occur. The hikes do not need to come at consecutive meetings," he added.

Waller's comments point to the Fed holding its policy rate steady at 3.75 to 4 per cent at the October 27-28 meeting, with an increase likely in December if data stays firm. The Fed raised rates by a quarter point in September.

He cited the energy price shock from the Iran war and new inflation pressure from the AI buildout, which is driving demand for key goods and services. Investors now expect no move in October but a hike at the December 8-9 session.