Waller Defends Fed’s 50 Basis Point Rate Cut Decision

Federal Reserve Board of Governors Member Christopher Waller shared insights regarding the FOMC’s decision to lower interest rates by 50 basis points during an interview that aired on Friday morning. He was the first Fed official to address the unusually large rate cut following Chair Jerome Powell’s comments after the recent meeting.

Waller affirmed that the 50 basis points reduction was appropriate, citing a robust economy and a decline in inflation, which the Fed aims to maintain.

He mentioned that recent inflation data contributed to his support for the larger rate cut. Notably, he pointed out that estimates indicate core PCE is currently running below the target, which influenced his decision.

Looking ahead, Waller emphasized that the Fed will make decisions based on incoming data. For instance, the Fed may consider pausing rate adjustments if progress on inflation stalls, and he remains open to another significant cut if deemed necessary.

He also emphasized that the Fed’s decision was not influenced by political factors.

Overall, Waller expressed confidence that the Fed is on track and believes inflation is moving in the right direction.