Federal Reserve Governor Christopher Waller has indicated that the Fed could begin cutting interest rates as early as its July meeting, signaling a potential shift toward easing monetary policy.
“I think we’re in the position that we could do this as early as July,” Waller said in an interview with CNBC on Friday. “That would be my view, whether the committee would go along with it or not.”
The Fed's policymaking group remains somewhat divided on the path forward, with some officials expecting no cuts this year and others projecting two or three reductions by the end of 2025.
Waller said that the inflationary impact from President Trump's tariffs on imported goods is expected to be minimal and likely temporary, suggesting the Fed should "look past" these price shocks when setting policy.
He added that the current economic data, including inflation and GDP growth, are close to the Fed's targets, and the labor market remains stable enough to consider rate cuts without waiting for a significant downturn in employment.
“Consolidation has been the theme in US stocks for some time, but hints of a more dovish approach from the Fed have been kept alive by Christopher Waller, who thinks the time has come for the Fed to cut rates,” IG chief market analyst Chris Beauchamp said.
“Even tariffs are not expected to provide a permanent boost to inflation, he added, bolstering the cause for ‘looking through’ any increase and focusing on the need to support the US economy.”