FED Member Christopher Waller Explained Why He Changed His Mind on Cutting Interest Rates

Federal Reserve Board member Christopher Waller made noteworthy comments regarding interest rate policy in his recent statements.

Waller stated that he initially considered calling for interest rate cuts following the weak employment data released in February, but increased inflation risks and geopolitical developments changed his view.

Speaking in an interview with CNBC, Waller stated that after the 92,000 job losses in February, he had planned to vote against the Fed’s decision to keep the policy rate unchanged and instead vote for a rate cut. “When I saw that data, I thought I would vote against a rate cut,” Waller said, but emphasized that global developments quickly changed the picture.

Waller noted that rising tensions, particularly in the Middle East, and the closure of the Strait of Hormuz due to Iran-related conflicts have driven up energy prices, thereby increasing the risks to inflation. Indicating that high oil prices could persist for a longer period, the Fed official stated that he therefore supports a more cautious policy approach.

Waller also stated that current monetary policy is already at a restrictive level and does not support interest rate increases at this stage. However, he added that if inflation starts to decline again and the labor market weakens, interest rate cuts could be considered again later in 2026.

*This is not investment advice.