Federal Reserve Governor Christopher Waller will speak at the Clearinghouse Annual Meeting held in New York City on November 12, 2024.
Brendan McDermid | Reuters
The Federal Reserve, a candidate to take over Jerome Powell as chairman in 2026, expressed his support on Wednesday to begin a fee-cutting cycle in two weeks, saying the central bank has the flexibility to adjust its pace in the future.
“When the labor market gets worse, it gets worse quickly… so for me, I think we need to start the reduction rate at the next meeting,” Waller said in an interview with CNBC’s “Squawk Box.” “We don’t have to move into a series of steps. People are still worried about tariff inflation, so we can see where things are heading. I’m not, but everyone else is.”
Waller, believed to be on a short list of potential successors to President Donald Trump’s Federal Reserve Chairman, was one of two Fed governors opposed from the July FOMC decision to stabilize central bank benchmark rates in the range of 4.25%-4.5%. It was the first time two governors have opposed the committee’s decision in more than 30 years.
Waller believes there should be multiple cuts in the coming months, and says interest rates today are probably 1.0-1.5 points above the “neutral” level.
“We could see multiple cuts coming in over the next three or six months. [what] “Waller said.
Waller acknowledged that tariffs are taxes on consumers that slow growth, but he has not seen a recession in his economic forecasts.
The Fed’s next policy meeting is scheduled for September 16th to 17th.
Waller declined to comment on Trump’s attempt to fire Fed Governor Lisa Cook, a fellow. However, he reiterated the importance of Fed Independence, saying that anyone who the central bank assumes leadership will remain independent.
“Fed independence is important to everything we do and there are times when things happening to make people worry, but we still believe there is an independent Fed,” Waller said. “Appointed people will behave like that and act apolitical.”
