On September 3, Federal Reserve Governor Christopher Waller reiterated his stance that a reduction in interest rates should occur at the upcoming September meeting, citing signs of softening in the labor market. Speaking in a CNBC interview, Waller emphasized that while initiating cuts is appropriate now, the speed and frequency of future reductions will hinge on incoming economic indicators. “I believe we should begin lowering rates at the next gathering, but there’s no need to follow a rigid schedule,” he noted, adding that uncertainty around tariff-related price pressures remains a concern. He projected that over the next three to six months, several rate reductions could be implemented if conditions warrant.
Waller, who was among the two Fed governors advocating for a rate cut in July, expressed the view that tariffs might lead to a temporary rise in inflation over the coming months. However, he anticipates inflation will resume its downward trend toward the central bank’s 2% target within six to seven months. With labor market demand showing signs of cooling, he argued for a gradual decline in the current policy rate—now set between 4.25% and 4.50%—toward an estimated neutral level of 3%. The timing and extent of these adjustments, he stressed, will be guided by evolving data.
Additionally, Waller confirmed he has had prior conversations with U.S. Treasury Secretary Scott Bessent but clarified that he has not been formally interviewed for the position of Fed chair and does not have such a meeting arranged at this time. Reports from the Wall Street Journal indicate that Bessent is expected to begin conducting interviews for the role starting Friday.
— news from Reuters
— News Original —
Fed’s Waller repeats call for rate cut in September, pace depends on data
Sept 3 (Reuters) – Federal Reserve Governor Christopher Waller on Wednesday repeated his call for an interest-rate cut in September given the weakening in the labor market, and said that how fast the central bank cuts after that will depend on what happens next in the economy. n n”I think we need to start cutting rates at the next meeting, and then we don ‘t have to go in a locked sequence of steps,” Waller said in an interview on CNBC. “We can kind of see where things are going, because people are still worried about tariff inflation … I would say over the next three to six months, we could see multiple cuts coming in.” n nSign up here. n nWaller, one of two Fed governors who dissented in favor of a rate-cut in July, said he believes tariffs may push up inflation over the next several months, but said he expects that to be temporary and for inflation to resume falling back toward the Fed ‘s 2% goal in six or seven months. n nGiven the drop in labor demand, he said, the Fed should start bringing the policy rate, now in the 4.25%-4.50% range, down toward an estimated neutral rate of 3% — with the pace of adjustments to depend on the economic data. n nWaller said he has spoken with US Treasury Secretary Scott Bessent in the past but has not had an interview for the job of Fed chair and does not yet have one scheduled. Bessent is expected to have a round of interviews for the job starting Friday, the Wall Street Journal reported.