Federal Reserve Governor Waller Advocates for October Rate Cut Amid Labor Market Uncertainty
Federal Reserve Governor Christopher Waller has expressed his support for an additional quarter-point interest rate cut at the central bank’s October meeting. This comes in light of escalating concerns about labor market instability, despite receiving mixed economic signals.
In a speech delivered to the Council on Foreign Relations on Thursday, Waller made his stance clear. “Based on all of the data we have on the labor market, I believe that the FOMC should reduce the policy rate another 25 basis points at our meeting that concludes October 29,” he stated.
Waller’s comments surface as the Fed attempts to balance a softening job market and persistent inflation pressures, which have been aggravated by ongoing trade tensions. Waller, a potential successor to Fed Chair Jerome Powell when his term concludes in May 2026, underscored the need for a cautious approach to future cuts.
“Since we don’t know which way the data will break on this conflict, we need to move with care when adjusting the policy rate to ensure we don’t make a mistake that will be costly to correct,” he cautioned.
The governor suggested that if the labor market continues to decline while inflation remains in check, the Fed could potentially lower rates by up to 1.25 percentage points, aiming for a neutral level of 2.75%-3.00%.
Source: CNBC