Federal Reserve Governor Christopher Waller said on Thursday that he supports another interest rate cut at the U.S. central bank’s October policy meeting, citing weakness in the labor market as a growing concern. His remarks came as Fed Governor Stephen Miran again pushed for a more aggressive rate-cutting strategy to counter rising economic risks.
Speaking at the Council on Foreign Relations in New York, Waller noted that the Federal Open Market Committee (FOMC) should lower the policy rate by another 25 basis points at the end of October. He added that future rate decisions would depend on incoming data, particularly how strong GDP growth aligns with a softening job market.
Waller also reiterated that trade tariffs are exerting only a modest influence on inflation and that price growth remains broadly on track to return to the Fed’s 2% target. This outlook, he said, allows policymakers to shift their focus to employment conditions, where “clear warning signs” are emerging.
“The broad message from all the labor market data is that demand is weakening relative to supply,” Waller said, noting declining labor participation and slower hiring. With limited government data available due to the federal shutdown, he said private indicators paint a mixed picture of the job market.
Waller added that if hiring rebounds alongside steady economic growth, further cuts might be delayed. But if job gains continue to slow and inflation stays subdued, the FOMC should move the policy rate closer to a neutral level — around 2.75% to 3.00%.
Meanwhile, in Washington, Stephen Miran, who is currently on leave from the Trump White House while serving on the Fed board, repeated his call for faster and deeper rate cuts in 2025. He argued that policy remains too restrictive, warning that leaving rates too high for too long increases the risk of an economic downturn.
Miran said that renewed U.S.-China trade tensions and shifting immigration policies justify a more proactive stance on monetary easing. He dismissed concerns about financial market imbalances, adding that the housing sector remains the most critical — and still constrained — part of the economy.
🏦 Fed Prepares for October Rate Cut Decision
The Federal Reserve will meet on October 28–29, with markets expecting another quarter-point cut following September’s reduction to a 4.00%–4.25% range. Forecasts suggest the federal funds rate could decline to between 3.5% and 3.75% by year-end, before easing further in 2026.
The rate cuts are intended to support a cooling labor market while inflation remains slightly above target — a situation complicated by the ongoing effects of President Donald Trump’s tariff policies.
Analysts at Evercore ISI said Waller’s latest remarks show a “shift from his previously dovish stance,” signaling that while an October rate cut is likely, further easing in December will depend on whether stronger growth leads to firmer labor data.
Recent data releases reinforce that uncertainty. The Philadelphia Fed’s October factory report showed mixed conditions, while the New York Fed’s survey of business leaders reported a sharp decline in service-sector activity, with few expecting improvement in the months ahead.
Earlier this week, Fed Chair Jerome Powell also left the door open for a potential October cut, noting that the balance of risks has shifted toward protecting employment as the economy faces new external headwinds.
Waller, a potential candidate to succeed Powell when his term ends next May, has been among the most consistent voices urging the Fed to act decisively to protect jobs while tolerating short-term inflation volatility caused by tariffs.
However, not all Fed officials share his outlook. Some remain cautious about cutting rates too quickly, arguing that inflation risks could reemerge if easing continues at the current pace.
