Fed Governor Waller Urges July Rate Cut Amid Economic Risks

Federal Reserve Governor Christopher Waller has made a strong case for cutting interest rates by 25 basis points at the Federal Open Market Committee's July meeting, arguing that the economy's growth momentum has slowed and risks to employment have increased. Waller contends that inflationary pressures from President Trump's tariffs are likely temporary and should not delay rate cuts, emphasizing that these tariff-induced price increases are one-time effects that policymakers can look through. He believes the Fed's policy rate should be closer to the neutral level of around 3%, significantly lower than the current 4.25%-4.5%, given the slowing private sector job growth and overall economic data. Waller's stance contrasts with that of Fed Chair Jerome Powell, who has maintained a more cautious approach, waiting to see the tariffs' full impact before adjusting rates, despite pressure from President Trump to cut rates aggressively. Other Trump appointees like Michelle Bowman also support a rate cut, reflecting internal divisions within the Federal Reserve. Waller has suggested that failing to ease monetary policy now could harm the economy later, and he is considered a potential successor to Powell.