Fed Governor Christopher Waller believes the Fed should cut rates, although he advises the central bank to take a “cautious” stance given a shaky labor market amid solid gross domestic product (GDP) growth.
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“Either the labor market rebounds to match the GDP growth, or that GDP growth is going to pull back,” Waller said in an interview on CNBC’s Squawk Box. “So whichever way that goes, it’s got to affect what you do with policy.”
Waller Backs Two More Rate Cuts by End of 2025
Waller supports the consensus Fed dot plot view for two more rate cuts by year-end, although a pace faster than that could disrupt the economy. “I mean, if you went 75 [basis points] tomorrow, then you have a bit of a problem,” he said. Earlier today, Waller was mentioned as one of the five finalists to replace Fed Chair Jerome Powell next year.
The market is also pricing in two more rate cuts by year-end, with CME’s FedWatch tool placing the odds at 92.2%.
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