❓WHAT HAPPENED: Federal Reserve Governor Christopher Waller suggested that interest rates could be lowered as early as next month due to reduced inflationary concerns and the possibility of a slowdown in the U.S. job market.
👤WHO WAS INVOLVED: Federal Reserve Governor Christopher Waller, Federal Reserve Chairman Jerome Powell, the Federal Open Market Committee (FOMC), and President Donald J. Trump.
📍WHEN & WHERE: Comments made during a CNBC interview on June 20, 2025, following the FOMC’s Wednesday rate announcement.
💬KEY QUOTE: “Why do we want to wait until we actually see a crash before we start cutting rates?” – Christopher Waller.
🎯IMPACT: The Federal Reserve remains divided on the timing of rate cuts, with President Trump clashing with Chairman Powell over his refusal to cut rates.
Federal Reserve Governor Christopher Waller stated on Friday that he believes interest rate cuts could begin as early as next month, citing diminished inflation concerns. Waller emphasized the need to act proactively to avoid a potential downturn in the labor market.
“I think we’re in the position that we could do this and as early as July,” Waller said during the interview on Friday. He added, “Why do we want to wait until we actually see a crash before we start cutting rates?” His remarks come after the Federal Open Market Committee (FOMC), the internal body within the Federal Reserve that sets interest rates, unanimously voted to hold its key interest rate steady, marking the fourth consecutive hold since the last rate cut in December.
President Donald J. Trump, who nominated Waller as a governor during his first term, has consistently called for significant rate cuts to ease borrowing costs on the national debt, which stands at $36 trillion. Trump has suggested that the benchmark rate should be at least two percentage points and possibly even 2.5 percentage points below the current level of 4.33 percent (an average of the rate range of 4.25 to 4.5 percent). Waller’s shift on rates is unusual, as the 66-year-old economist has for some time been seen as one of the central bank’s more ardent inflation hawks.
Despite Waller’s advocacy for rate cuts, the FOMC remains divided. According to the “dot plot” of individual officials’ expectations, seven out of 19 participants expect rates to remain steady this year, while the others foresee one to three cuts. Fed Chairman Jerome Powell has maintained a wait-and-see approach, citing claims Trump’s tariffs will increase inflation, but the labor market is holding steady and inflation remains under control.
Waller argued for gradual cuts to minimize unforeseen issues. “You’d want to start slow and bring them down, just to make sure that there’s no big surprises. But start the process. That’s the key thing,” he said. Futures market pricing indicates little expectation of a rate cut at the upcoming July meeting, with the next move anticipated in September.
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