Federal Reserve Governor Christopher Waller signaled on Friday that the central bank should seriously consider cutting interest rates at its next policy meeting in late July, citing softening inflation data and an economic environment that may not justify continued high borrowing costs. Waller’s remarks were the first from a Fed official following this week’s Federal Open Market Committee (FOMC) meeting, and they stand in contrast to more cautious tones from Chair Jerome Powell and other policymakers.
Speaking on CNBC’s Squawk Box, Waller dismissed concerns that President Donald Trump’s aggressive new tariffs would spark lasting inflation. “Any tariff inflation … I don’t think is going to be that big and we should just look through it in terms of setting policy,” he said. “The data the last few months has been showing that trend inflation is looking pretty good … We could do this as early as July.”
His dovish tone arrives at a politically sensitive moment. President Trump has continued to criticize Fed Chair Powell in public, recently calling him a “stupid person” and suggesting Powell is more political than competent. Powell’s term expires next year, and Trump is expected to name a successor in the coming months. Waller, who has signaled increasing openness to rate cuts, is seen as a strong contender for the role.
Waller’s comments diverge from the Fed’s official projections released earlier this week, which showed expectations for two rate cuts before year-end, but no firm timing. The central bank left its target range unchanged at 4.25% to 4.5%, with Powell emphasizing uncertainty surrounding trade policy and its effects on inflation and growth. “For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments,” Powell said at the post-meeting press conference.
Meanwhile, fresh data from the Philadelphia Fed offered a cautionary note. Factory activity in the region contracted for the third consecutive month, and hiring weakened—adding to the perception that the labor market may be softening beneath the surface. Waller echoed that concern, citing increasing difficulty among recent college graduates in securing employment.
“I’m all in favor of saying maybe we should start thinking about cutting the policy rate at the next meeting, because we don’t want to wait till the job market tanks,” Waller said.
Waller’s view puts him at odds with many of his colleagues, who have emphasized a more measured approach. Still, his stance aligns more closely with the Trump administration’s push for faster rate cuts to stimulate the economy, especially as trade disruptions and slowing global growth weigh on business sentiment.
The United States of America is the greatest country in the world yet it has to suffer with the highest interest rates of any first class country. Our Federal Reserve Chair is obviously afraid of his own shadow.
What was really sad about Powell’s comments is that he stated that… pic.twitter.com/QjpRud0kaK
— Howard Lutnick (@howardlutnick) June 21, 2025
