Fed Governor Says He’s In Favor Of Pausing Interest Rate Cuts

US Federal Reserve Governor Christopher Waller has said that he is in favor of pausing interest rate cuts as inflation remains uneven.

“I continue to believe that the current setting of monetary policy is restricting economic activity somewhat and putting downward pressure on inflation,” Waller said in a Feb. 17 speech in Sydney, Australia.

Interest Rate Cuts Not Needed Because Inflation Numbers Are “Still Too High”

Waller said during the speech that the current 12-month readings are lower than January of last year, which points to some progress.  Despite this progress, Waller believes that the numbers are “still too high.” As such, he said he favors “holding the policy rate steady.” 

Waller did, however, leave open the possibility of future monetary easing.“If this winter-time lull in progress is temporary, as it was last year, then further policy easing will be appropriate,” Waller said during the speech.

The next Fed meeting will be in March. Data from the CME Group’s FedWatch Tool puts the odds of even a minimal 0.25% interest rate cut announcement at this next policy meeting at just 2.5%.

Trump Trade Tariffs Won’t Have Such A Big Effect On Prices

Waller went on to downplay the effect that US President Donald Trump’s trade war will have on inflation. He speculated that any new tariffs will likely “modestly increase prices.” However, he warned that there is still the possibility that the effects of the tariffs could be larger than he anticipates.

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