Fed’s Waller Hints at July Rate Cut—Markets Brace for Impact

Rumblings from the Fed send shockwaves through financial markets as Governor Waller drops the strongest hint yet at a July rate cut.

Why it matters: With inflation cooling (or so they claim), the central bank appears ready to pull the trigger—just in time for election season. How convenient.

The setup: Waller’s speech yesterday telegraphed what traders already suspected—the Fed’s running out of excuses to keep rates elevated. Cue the market’s Pavlovian response.

The punchline: When the money printers get nervous, they always reach for the same playbook. Gold and crypto are licking their chops.

Bonus jab: Nothing stimulates the economy like juicing asset prices for the 1% while Main Street drowns in shrinkflation.

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“I think we’re in the position that we could do this and as early as July,” said Fed Governor Christopher Waller in an interview with CNBC’s Squawk Box. “That WOULD be my view, whether the committee would go along with it or not.”

Inflation Shock Hasn’t Arrived, Says Waller

Waller added that the process of cutting rates should start slow, which would mean cutting by 25 basis points at a time. He also said that the central bank has held out on cutting rates for six months in order to wait for an inflation shock that has never materialized.

“Why do we want to wait until we actually see a crash before we start cutting rates?,” said Waller in regard to the labor market, which has remained resilient.

Lower interest rates could provide the stock market with a boost, as it decreases borrowing costs for both companies and individuals. That could stimulate corporate growth and spending, stimulating the economy in the process.

Keep up with the federal funds rate and other key economic metrics with TipRanks’ Economic Indicators Dashboard.