Federal Reserve Governor Christopher Waller on Friday reiterated his support for an interest rate cut at the central bank’s upcoming July 29–30 policy meeting and suggested he may dissent if the Federal Open Market Committee (FOMC) opts to hold rates steady.
In a televised interview with Bloomberg, Waller made it clear he sees sufficient justification for easing policy now, citing growing signs of weakness in the labour market and subdued inflation.
He added that it is important not to dissent frequently, but said that at this moment, this was an important thing to do.
He drew a parallel to his dissent earlier this year on the Fed’s balance sheet slowdown, which he argued was not needed at the time.
“That’s kind of the situation we’re in now,” he added.
Labour market on the edge
Waller first outlined his case for a rate cut in a speech Thursday in New York, arguing that recent labour market data indicates the US economy is cooling more than headline numbers suggest.
In his remarks Friday, he emphasised that most of June’s job growth came from the public sector, while private-sector hiring slowed sharply.
“The private sector is not doing as well as everybody thinks it is,” Waller said.
“Most of the employment growth we saw last month was in the public sector, and that means the private sector is not doing particularly well.”
The June employment report, released on July 3, showed a sharp slowdown in private-sector job additions and a deceleration in wage growth, despite a slight decline in the unemployment rate.
Muted inflation and temporary tariff effects
Waller also dismissed concerns that rising tariffs could stoke inflation, saying he sees the price effects as temporary.
Other Fed officials have expressed more caution, pointing to the risk that higher import costs could eventually feed into broader inflation.
While markets still expect the Fed to keep rates unchanged in July, data shows that investors are now assigning slightly better than 50% odds to a rate cut at the FOMC’s next meeting in September.
Succession speculation and credibility warning
Waller also addressed growing speculation about his potential candidacy to succeed Federal Reserve Chair Jerome Powell, whose term ends in May 2026.
Though his name has surfaced in discussions about the central bank’s future leadership, Waller said no conversations have taken place.
“If he [Trump] says, ‘Chris, I want you to do the job,’ I’ll say ‘yes’. But he’s not talking to me,” Waller said, downplaying the speculation as “a hypothetical that isn’t relevant.”
Still, Waller underscored the importance of market confidence in whoever is chosen to lead the central bank next.
“Whoever they choose, you’re going to have to have somebody that has credibility with the markets,” he said.
He warned that lacking such credibility would trigger adverse consequences:
“You’re going to see inflation expectations spike. You will not get lower interest rates. You will get higher interest rates.”
The post Fed Governor Waller reiterates case for rate cut in July policy meeting appeared first on Invezz
