Federal Reserve Governor Christopher Waller has indicated that the US central bank should initiate interest rate cuts this month, with the potential for multiple reductions in the coming months. In an interview with CNBC, Waller stated, “We need to start cutting rates at the next meeting, and then we don’t have to go in a locked sequence of steps.” He added that this approach would allow policymakers to assess evolving economic conditions, particularly concerning tariff-related inflation.
Echoing a similar sentiment, St. Louis Fed President Alberto Musalem acknowledged that while current interest rates are appropriately positioned, risks to employment have increased, and inflation threats have somewhat decreased. During a speech at the Peterson Institute for International Economics in Washington, Musalem noted that the current policy rate aligns with a full-employment labour market and core inflation levels slightly above the Fed’s 2% target.
Atlanta Fed President Raphael Bostic also released an essay reiterating his perspective that one rate cut is likely suitable this year. Bostic wrote, “While price stability remains the primary concern, the labour market is slowing enough that some easing in policy — probably on the order of 25 basis points — will be appropriate over the remainder of this year.” He also clarified that this outlook remains contingent on the future trajectory of inflation and employment market dynamics.
