WASHINGTON (AP) — Federal Reserve governor Christopher Waller said Thursday that an inflation report next week will largely determine whether he supports an interest rate hike later this month or not.

The government will release August inflation figures Sept. 11, and if that report shows inflation continues to cool, then Waller said he would be willing to keep the Fed's benchmark interest rate unchanged.

“But if inflation comes in hot, I would consider a rate hike,” Waller said. Borrowing costs are only “slightly restricting” consumer and business demand, he added, “and it may not take much acceleration in inflation to nudge me into supporting” a rate hike.

Waller is an outspoken member of the Fed's seven-person governing board and his remarks add even more weight to the upcoming inflation data. Several members of the Fed's rate-setting committee have voiced concerns that price increases are still too high, suggesting a rate hike may be needed. Yet others have suggested inflation is slowly cooling and higher borrowing costs are not needed.

Fed Chair Kevin Warsh said last week that inflation hasn't shown sufficient improvement and the Fed might have “more work to do,” a sign he is weighing a rate increase at the Fed's next meeting Sept. 15-16.

Wall Street investors sharply increased their bets on a rate hike at the September meeting after Warsh's speech. Some bond yields also moved higher on Warsh's remarks, which have raised the stakes for the September meeting.