Fed Governor Christopher Waller struck a notably dovish tone in a speech overnight, arguing that inflation risks have diminished and that weakening labor conditions now deserve greater attention.
Waller said he is “not worried about inflation accelerating”, adding that after months of cooling job data, it is unlikely that this week’s September employment report—or any incoming releases—would alter his view that “another cut is in order.” He warned that restrictive monetary policy is weighing disproportionately on lower- and middle-income consumers, reinforcing the case for easing.
Waller said a December cut would offer “additional insurance” against further deterioration in the labor market and help move policy closer to a neutral setting.
Separately, Vice Chair Philip Jefferson offered a more balanced perspective in his speech, acknowledging that policy has already been guided closer to neutral rate. He added, “The evolving balance of risks underscores the need to proceed slowly as we approach the neutral rate.”
