Federal Reserve Governor Waller
- The time has come to move policy to a more neutral stance
- Would support 25 bps cut at Fed’s September meeting
- Waller says he anticipates additional rate cuts over next 3–6 months
- Don’t believe a bigger September cut is needed, unless August jobs report shows substantial weakening and inflation stays well-contained
- Wanted rate cut in July, feels more strongly about it now
- Waller says policy rate is ‘moderately restrictive,’ estimated at 1.25 to 1.50 percentage points above neutral
- Underlying inflation, factoring out temporary effect of tariffs, is close to 2%
- Labor demand is weakening, and that is not good
- Downside risks to labor market have increased
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The Fed next meets on September16 and 17. A rate cut is widely expected despite high inflation. Rate cut bets increased after labour force data was revised lower in the previous NFP.
This article was written by Eamonn Sheridan at investinglive.com.
