WASHINGTON–Two members of the Federal Reserve Board’s Open Market Committee are expressing slightly different timelines for when they believe the Fed can begin cutting rates.
Federal Reserve Governor Christopher Waller said he is not anticipating President Trump’s tariffs will boost inflation and as a result the Fed should be able to begin reducing rates when it meets in July.
In remarks to CNBC, Waller said he expects the Fed will move slowly but start to ease as inflation is not posing a major economic threat. It’s a trend he expects will continue.
“I think we’re in the position that we could do this as early as July,” Waller said during a “Squawk Box” interview with CNBC’s Steve Liesman. “That would be my view, whether the committee would go along with it or not.”
Watching Labor Market
Waller said he believes the Fed should cut to avoid a potential slowdown in the labor market.
“If you’re starting to worry about the downside risk [to the] labor market, move now, don’t wait,” he told CNBC. “Why do we want to wait until we actually see a crash before we start cutting rates? So, 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 before we start cutting the policy rate.”
At its June meeting the FOMC kept rates locked in a target range of 4.25%-4.5%.
Wait Until Fall
San Francisco Fed President Mary Daly told CNBC she would be more comfortable with waiting until there’s more clarity on the impact of tariffs.
“I think we want to be thoughtful enough to collect the information, and we do have these three scenarios that could unfold,” Daly said. “So. I’m for me, I look more to the fall, and by then we’ll have quite a bit more information.”
