Federal Reserve Vice Chair Christopher Waller has hinted at a potential interest rate cut during the Fed's upcoming meeting in July, suggesting the central bank should begin easing its monetary policy rather than waiting for more severe signs of economic downturn.
In an interview with CNBC, Waller stated that while caution is still necessary, it may be time for the Fed to act proactively. “If you're worried about downside risks in the labor market, why wait for a collapse before lowering rates?” he said. “It might be appropriate to start considering a rate cut at our next meeting.”
Waller emphasized that the recent implementation of tariffs is not expected to cause a significant spike in inflation and thus should not deter the Fed from adjusting its policy. He advocated for a gradual but decisive shift toward rate reduction, especially since current employment and inflation data allow for such a move without triggering instability.
Waller’s remarks have drawn the attention of global markets, as any policy shift from the Fed would likely ripple across the global economy, affecting everything from currency markets to consumer lending.