Fed Governor Waller calls for 25 bps rate cut at September meeting

[Percentage sign cut in half by scissor]
J Studios

Federal Reserve Governor Christopher Waller said Thursday he favors beginning U.S. interest rate cuts next month and anticipates additional cuts over the next three to six months, aiming to “ease monetary policy and move it to a more neutral stance.”

The U.S. central bank held its policy rate steady at the 4.25%-4.50% target range for a fifth straight meeting in July, despite President Donald Trump’s calls for lower borrowing costs. The Fed's next policy meeting is scheduled for September 16-17.

“I favored reducing the federal funds rate by 25 basis points at the FOMC's July meeting, and subsequent data on the labor market and inflation indicate this was the right call,” […] Based on what I know today, I would support a 25 basis point cut at the meeting on September 16 and 17,” Waller said Thursday.

“While there are signs of a weakening labor market, I worry that conditions could deteriorate further and quite rapidly, and I think it is important that the FOMC not wait until such a deterioration is under way and risk falling behind the curve in setting appropriate monetary policy,” he added.

Waller also said he did not think “a cut of larger than 25 basis points is needed in September.” Though he said that view could change if the employment report for August points to a substantially weakening economy, and inflation remains well contained.

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