Fed Governor Christopher Waller said he would support a 25bps cut at the September 16–17 FOMC meeting, warning that waiting for further labor market deterioration would risk the Fed “falling behind the curve.” He said conditions warrant a move now to put policy on a path toward neutral.
He placed the neutral rate near 3%, around 125–150bps below current levels. While not convinced the Fed is behind the curve yet, he emphasized that signaling a path toward neutral is a way to reassure markets that the Fed won’t let policy remain too tight for too long.
Waller said he expects more easing over the next three to six months, “and the pace of rate cuts will be driven by the incoming data”. He left open whether that would mean “a sequence of cuts” or a more gradual adjustment with pauses. Either way, he made clear that policy should head steadily toward neutral. “It’s just a question how fast we get there,” he added.
The stance reflects his dissent at the July 30 meeting alongside Governor Michelle Bowman. Both argued then that signs of a softening labor market were enough reason to begin easing earlier.
