Fed Governor Waller Backs September Rate Cut, Open to Larger Reduction

Federal Reserve Governor Christopher Waller confirmed that he will support an interest rate cut at the upcoming central bank policy meeting, scheduled to take place in less than two weeks. In remarks prepared for the Council on Foreign Relations in New York, Waller expressed openness to a more significant rate cut if necessary.

“Considering the achieved and continuing progress on inflation and moderation in the labor market, I believe the time has come to lower the target range for the federal funds rate at our upcoming meeting,” Waller said.

He added, “Determining the pace of rate cuts and the total reduction in the policy rate are decisions for the future. I’m open-minded about the size and pace of cuts, and if the data suggests the need for larger reductions, I will support that as well.”

Waller’s comments followed a weaker-than-expected nonfarm payrolls report released Friday, which showed that hiring is slowing down. The Labor Department reported job growth of 142,000 in August, slightly higher than July’s figures but below the Dow Jones forecast of 161,000.

While Waller did not specify how much the Fed should cut rates, he indicated openness to a more aggressive approach to support the labor market. He also suggested that additional cuts may be necessary, stating, “I do not expect this first cut to be the last. With inflation and employment near our longer-run goals and the labor market moderating, it is likely that a series of reductions will be appropriate.”

Waller’s remarks come as the Federal Reserve continues to balance its dual mandate of promoting maximum employment and stable prices.