- Waller hints at potential rate cuts contingent on tariff reductions.
- Fed remains open to monetary easing in late 2025.
- Market reacts positively to possible policy shifts.
Federal Reserve Governor Christopher Waller has hinted at potential rate cuts in 2025, contingent on President Trump’s tariff policies maintaining about 10%. Waller discussed these prospects in a recent Fox Business interview from Washington, D.C.
Waller’s stance on 2025’s rate cuts could influence economic policies and investor sentiment amid ongoing trade negotiations. His remarks align with his optimistic view on tariff resolutions. The Federal Open Market Committee (FOMC) has maintained its rate amidst economic expansion. Jerome Powell remains cautious about tariff impacts, preferring a wait-and-see approach.
The market reacted modestly, with the S&P 500 experiencing a rise following Waller’s remarks. Financial stability remains a priority, with a focus on inflation and employment metrics.
Waller outlines scenarios based on tariff adjustments. A successful negotiation might allow monetary easing. Jamie Dimon of JPMorgan supports Powell’s measured stance on tariff impacts.
“If we can get the tariffs down close to the 10% and then that’s all sealed, done and delivered somewhere by July, then we’re in good shape for the second half of the year, and then we’re in a good position to kind of move with rate cuts through the second half of the year.” — Christopher J. Waller, Governor, Federal Reserve
Waller’s statements underscore the need for balance between inflation control and economic growth. Historical data suggests cautious optimism, as the Fed navigates potential policy shifts impacting economic dynamics.
