There’s speculation about when the Fed will resume its interest rate cuts, which have been on hold since January. At this point, the majority of Fed members expect the first rate cut of the year to occur in July or September at the latest.
Speaking recently, Fed member Christopher Waller stated that he wants to cut interest rates in July due to rising growth and labor market risks.
Speaking at the New York University Money Marketers meeting, Waller said he believes the Fed should cut interest rates at the end of July because of the growing risks to the economy and the high likelihood that inflation from tariffs will lead to a persistent increase in price pressures.
“It makes sense for the FOMC to cut the policy rate by 25 basis points at its meeting in two weeks at the end of July.
“I see the hard and soft data on economic activity and the labor market as consistent: The economy is still growing, but its momentum has slowed significantly, and risks to the (Federal Open Market Committee’s) employment mandate have increased. This justifies lowering interest rates.”
Waller warned that delaying a rate cut this month could lead to more aggressive measures in the future. He added that Fed policy is not set in stone and that decisions about where to set interest rates will be made on a meeting-by-meeting basis.
The FED last lowered its policy rate by 25 basis points in December 2024.
Aside from his expectations for a rate cut, Waller also made statements about stablecoins. Following the approval of the GENIUS and Clarity Acts in the US House of Representatives, Waller stated that stablecoins introduce competition to the payments system but do not pose a threat.
Waller added that no one from the Donald Trump administration contacted him about the Fed chair position.
*This is not investment advice.