American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Latest News

Fed governor Waller advocates for July rate cut amid tariff, labor market outlook

by admin June 21, 2025
June 21, 2025

On Friday, Federal Reserve Governor Christopher Waller indicated that he anticipates tariffs will not substantially increase inflation.

Therefore, he believes policymakers should consider reducing interest rates as soon as next month.

In a CNBC interview, the central banker said he and his colleagues should begin gradually easing monetary policy, noting that inflation is not currently—and is unlikely to become—a significant threat to the economy.

Rate cut probability in July

“I think we’re in the position that we could do this as early as July,” Waller said during the interview. 

That would be my view, whether the committee would go along with it or not.

Two days prior, the Federal Open Market Committee opted to maintain its key interest rate, marking the fourth consecutive hold since the last reduction in December.

During his first term in office, US President Donald Trump appointed Waller as a governor. 

Trump has consistently exerted pressure on the Federal Reserve to decrease interest rates. 

His rationale for this push is to alleviate the borrowing costs associated with the substantial national debt, which currently stands at $36 trillion.

This ongoing pressure reflects a broader economic strategy aimed at stimulating growth and reducing the financial burden on the government.

Labour market concern

Waller believes the Fed should implement cuts to preempt a potential deceleration in the labor market.

“If you’re starting to worry about the downside risk [to the] labor market, move now, don’t wait,” he said. 

Why do we want to wait until we actually see a crash before we start cutting rates?

So I’m all in favor of saying maybe we should start thinking about cutting the policy rate at the next meeting, because we don’t want to wait till the job market tanks before we start cutting the policy rate.

Gains were observed in stock market futures following Waller’s remarks.

It remains uncertain if Waller can garner significant support for his stance.

At this week’s meeting, the FOMC, with Waller’s vote, decided to maintain the benchmark federal funds rate within its target range of 4.25%-4.5%.

Policymakers are uncertain about the future direction of interest rates, as evidenced by the “dot plot” of individual officials’ expectations. 

While the median outlook suggests two rate cuts this year, the dispersion of views is notable.

Seven of the 19 meeting participants anticipate rates remaining steady, two foresee only one cut, and the remaining ten expect two or three reductions.

A cautious approach is likely by the Fed

During remarks made on Wednesday before the Fed meeting, Trump called Fed Chair Jerome Powell “stupid” for not pushing to cut, advocating for significant changes. 

He believes the benchmark rate should be at least 2 percentage points lower, and even suggested it should be 2.5 percentage points below the current level of 4.33%.

Waller, a potential successor to Powell—whose term as chair concludes in May 2026—advocated for a cautious approach by the committee. Meanwhile, Trump has indicated an imminent announcement regarding his intentions.

“You’d want to start slow and bring them down, just to make sure that there’s no big surprises. But start the process. That’s the key thing,” Waller said. 

We’ve been on pause for six months to wait and see, and so far, the data has been fine…I don’t think we need to wait much longer, because even if the tariffs come in later, the impacts are still the same. It should be a one-off level effect and not cause persistent inflation.

Apprehensions

Other officials have been hesitant to implement cuts, preferring to observe the long-term effects of Trump’s tariffs on inflation, the labor market, and overall economic growth.

“We’ve been on pause for six months, thinking that there was going to be a big tariff shock to inflation. We haven’t seen it. We follow the data,” Waller said. 

I’ve been arguing since a year ago that central banks should be looking through this.

At his post-meeting news conference on Wednesday, Powell reiterated his belief that the Fed can maintain its wait-and-see approach as the labor market remains strong. 

Recent inflation data indicates minimal pass-through, as companies deplete inventory accumulated before the tariff announcement, amidst concerns of slowing consumer demand and reduced pricing power.

According to the CME Group’s FedWatch measure, the futures market pricing suggests almost no possibility of a rate cut at the July 29-30 meeting. Instead, the next rate adjustment is anticipated in September.

The post Fed governor Waller advocates for July rate cut amid tariff, labor market outlook appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
Circle stock price forecast: opportunities and risks
next post
Top catalysts for Dow Jones Index this week

Related Posts

German exports tumble, raising concerns about economic recovery

December 13, 2024

‘Everything is burning’: Battles rage outside Kharkiv as...

May 24, 2024

New Odysseus lunar mission will attempt to make...

February 19, 2024

Hundreds of Israeli settlers attack Palestinian villages in...

April 16, 2024

Berkshire Hathaway posts 4% dip in Q2 operating...

August 3, 2025

Israeli airstrikes target Yemen’s Houthis day after deadly...

July 21, 2024

Taiwan’s new president calls on China to stop...

May 21, 2024

Pluto gained a ‘heart’ after colliding with a...

April 20, 2024

Wooden turbine towers could make wind power even...

April 11, 2024

A fierce storm uncovered a mysterious shipwreck. Now...

February 15, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • Why is Spain’s economy doing well?

      August 23, 2025
    • India proposes 3-year steel import tariff to counter China

      August 18, 2025
    • Soho House to go private in $2.7B deal led by MCR Hotels

      August 18, 2025
    • As Zelenskiy heads to face Trump, allies hold crisis talks over forced-deal fears

      August 17, 2025
    • US tariffs push India away from Russian oil, bolstering Iraq’s position in Asia

      August 10, 2025

    Categories

    • Business (3,742)
    • Investing (2,766)
    • Latest News (2,040)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved