Rate reductions can come out earlier than the expectations of the consensus, according to the governor of the Federal Reserve Christopher Waller.
In a new interview with CNBC, Waller says that the Federal Open Market Committee (FOMC) can lower the federal fund rate as quickly as possible.
“Every tariff inflation that we should see, and I have received different estimates, and I don’t think it will be so big, and we just have to look through it in terms of setting up policy and looking at the underlying trend of inflation. And at the moment the data that can actually show in the last few months are we can actually be applied.
I have been saying this since November ’23. So I think we are in that position that we can already do this in July. “
Waller says that that is only his vision and acknowledges that the FOMC may not be able to share that opinion.
The FOMC announced on Wednesday that it was planning to maintain the target range for the federal funds at 4.25-4.5%, with the argument that this was the most suitable level to achieve both maximum employment and controlled inflation. The FED has kept the interest rates stable since December if it reduced the rate by 0.25%.
CME Fed Watch tool indicates that there is only a chance of 14.5% on a rate reduction in July, but a chance of 61.8% of one during the FOMC meeting in September.
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