Federal Reserve President Christopher Waller said on Friday that while he continued to support lower interest rates, the central bank needed to be careful amid conflicting economic data.
“I still believe we need to cut rates, but we need to be somewhat cautious about cutting rates,” Waller said in an interview on CNBC’s “Squawk Box.”
Meanwhile, the U.S. labor market appears to be losing jobs, which could signal a broader economic slowdown, he said. Meanwhile, gross domestic product growth remains strong and concerns about inflation remain, with inflation still well above the Fed’s 2% target.
“Something has to give. Either the labor market recovers in line with GDP growth, or GDP growth regresses. So whichever way it goes, that should have an impact on how policy is done,” Waller said. “I want to move towards lower rates, but I’m not going to cut rates aggressively and quickly in case I make a big mistake about where things are going.”
At its September meeting, the Federal Open Market Committee, which sets interest rates, approved the first quarterly rate cut since December 2024. Additionally, members indicated that two more rate cuts are likely before the end of the year, in a quarterly update of each member’s forecast “dot plot.”
Waller said he was satisfied with that pace but didn’t think the Fed should move faster than it did. His new colleague, Governor Stephen Milan, appointed by President Donald Trump, is pushing for a deep half-point cut and wants the Fed to cut the federal funds rate by another 1.25 percentage points by the end of the year.
“We can always make adjustments as data comes in,” Waller said. “So, when you’re 75 years old, [basis points] There might be a little problem tomorrow. ”
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