Fed Governor Waller Advocates for 25bps Rate Cut Amid Labor Market Concerns

Federal Reserve Governor Christopher Waller has endorsed a 25 basis-point rate reduction at the upcoming October FOMC meeting, citing softening labor market conditions. Speaking at the Council on Foreign Relations, Waller emphasized data-dependent caution: "The FOMC should reduce rates by 25 basis points, but beyond October, we'll need to reconcile strong GDP with employment trends."

The remarks highlight growing divisions within the Fed. Governor Stephen Miran is reportedly pushing for a more aggressive 50bps cut, arguing that geopolitical risks and weak job numbers demand stronger action. This policy rift emerges as inflation remains stubbornly elevated under tariff-related price pressures.

Waller outlined two potential pathways: maintaining gradual cuts if employment rebounds, versus deploying 125bps of easing should economic conditions deteriorate further. "The critical mistake," he warned, "would be reigniting inflation through premature overstimulation."