Fed Governor Waller Backs September Rate Cut, Further Reductions Expected

Federal Reserve Governor Christopher Waller has strongly advocated for a quarter-point interest rate cut in September, emphasizing the need to ease monetary policy to support a weakening labor market and prevent further economic deterioration. He believes that while a larger cut is not currently necessary, incoming economic data, particularly the August jobs report, could influence the pace of reductions. Waller forecasts a series of additional rate cuts over the next three to six months, aiming to move policy to a more neutral stance from the current moderately restrictive level. His position marks a shift toward easing monetary conditions after months of steady rates, aligning with concerns about slowing labor demand and the risk of falling behind the curve on monetary policy. Waller, appointed by President Trump, has consistently pushed for earlier rate cuts and is considered a key voice within the Fed advocating for this approach. The market is closely watching the upcoming Federal Open Market Committee meeting in mid-September, where a cut is widely expected despite persistent inflation.