Fed Governor Advocates for July Rate Cut Amid Economic Concerns

Federal Reserve Governor Christopher Waller has issued a stark warning: delaying an interest rate cut beyond July could jeopardize the U.S. economy. Speaking at the Money Marketeers of New York University, Waller emphasized the need for a 25-basis-point reduction at the upcoming Federal Open Market Committee (FOMC) meeting. "I believe it makes sense to cut the FOMC’s policy rate by 25 basis points two weeks from now," he stated.

Waller dismissed tariff-induced inflation as transient, arguing that broader economic indicators should take precedence. While the economy continues to grow, albeit at a slower pace, rising unemployment risks justify immediate action. "A weaker job market is greater and sufficient to cut interest rates," he asserted, cautioning against waiting for further labor market deterioration.

The Fed’s July 29-30 policy meeting will be pivotal. Waller and Vice Chair for Supervision Michelle Bowman stand alone among officials in advocating for near-term rate cuts. Others, including Governor Adriana Kugler and New York Fed President John Williams, remain hesitant. Waller’s focus remains on underlying inflation, now perilously close to the Fed’s 2% target, rather than temporary tariff-related pressures.