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Fed’s Waller: Hold Your Horses on Rate Cuts, Inflation Needs a Reality Check!


Fed’s Waller wants more evidence inflation is cooling before cutting interest rates


Federal Reserve Governor Christopher Waller said he will need to see more evidence that inflation is going down before he supports cutting interest rates.

Waller is worried that inflation may not fall to the Fed’s 2% goal as expected, and wants to wait until inflation is under control before lowering rates.

He mentioned that the high inflation in January made him question the direction inflation is headed in, and he wants to see at least two months of more data before reaching a conclusion.

The Fed’s preferred inflation gauge, core personal consumption expenditures prices, is expected to show a rise of 2.8% when it is released this month, strengthening Waller’s case for waiting.

Data on consumer spending, employment, and wages and compensation will also be closely monitored.

While Waller expects rate cuts sometime this year, the timing remains uncertain.

Markets had previously expected a rate cut in March, but the possibility has been pushed back to June, with a chance of delay until July.

Other Fed officials, such as Vice Chair Philip Jefferson and Governor Lisa Cook, have also indicated a willingness to cut rates later this year, but emphasize the need for caution.

  • Overall sentiment: negative
  • Positive

    “Waller said he still expects the FOMC to begin lowering at some point this year.”

    “Such elevated readings make the case stronger for waiting, he said.”


    “The remarks are consistent with a general sentiment at the central bank that while further rate hikes are unlikely, the timing and pace of cuts is uncertain.”

    “However, while she also expects to cut this year, Cook said, she “would like to have greater confidence” that inflation is on a sustainable path back to 2% before moving.”

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