Fed member calls for interest rate cut by end of July

Federal Reserve Governor Christopher Waller said he supports a 25 basis point interest rate cut at the July 29-30 policy meeting, citing escalating risks to the economy and weakening labor market momentum.

Waller explained during a speech at a New York University event on Friday morning that data indicates continued economic growth, albeit at a slower pace, reinforcing the need for monetary policy easing.

Waller believes that inflationary pressures from tariffs imposed by President Donald Trump's administration will be temporary, asserting that the Fed can ignore their impact and instead focus on deeper trends within the economy.

He noted that the current interest rate, which is between 4.25% and 4.5%, is not consistent with the neutral level of approximately 3%. He emphasized that if growth continues to slow and inflationary pressures remain contained, he would support further gradual rate cuts in future meetings.

Waller warned that postponing the interest rate cut until September or later could deprive the Fed of its ability to respond quickly to a slowing economy, stressing that taking an early step in July gives policymakers more room to assess developments later