Federal Reserve (Fed) Board of Governors member Christopher Waller believes that financial markets overreacted to last week’s U.S. inflation slowing down data.

“It was just one report,” Waller said at an event in Sydney hosted by UBS.

“The markets seem to be getting ahead of the situation. Everybody needs to take a deep breath and calm down. We still have a lot of work to do,” Waller was quoted as saying by Market Watch.

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The Labor Department report released last Thursday showed a slowdown in inflation in the country to its lowest level since January. Consumer prices (CPI) in the U.S. rose 7.7 percent in October compared to the same month a year earlier. Inflation slowed from 8.2% in September and was below the average forecast of 8% by analysts polled by Trading Economics.

The U.S. stock market ended last week with a solid gain, with the S&P 500 index gaining 5.9%, its highest level since June, and the Nasdaq Composite showing its biggest gain since March, up 8.1%. According to Waller, the released data is a good sign, but the Fed has seen signals of slowing inflation more than once over the past year.

“We’ll need to see further signals of easing inflation before we really start thinking about taking our foot off the brake pedal,” he said, referring to the Fed’s rate hike.

“We have a long, very long way to go to slow inflation. The rate will continue to go up, and it will stay high for a while, until we see it get closer to our target level,” Waller said.

At this point, he said, the Fed is focusing on determining the level to which it should raise the rate, and making that decision will depend solely on the rate of inflation.

“The “worst” thing the Fed could do would be to stop the rate hike and allow inflation to spike again, Waller said.

In early November, the Fed raised the rate by 75 basis points for the fourth consecutive meeting, to 3.75-4% per year, the highest since January 2008.

Earlier, we reported that Asian equity markets are changing in different directions during trading.