US Fed Governor Says Rate Cuts Could Resume in the First Half of 2025 If Economic Trends Continue

U.S. Federal Reserve Governor Christopher Waller says multiple rate cuts are possible in the first half of the year.

In a new interview with CNBC, Waller notes that recent data suggests inflation is coming down.

“If we continue getting numbers like this, it’s reasonable to think that possibly rate cuts could happen in the first half of the year…

It depends if — always the big word ‘if’ — if the inflation data continues to come in like it has been. If we don’t, if we get a surprise like we did last year, then we’re going to have to stay on hold until we get inflation coming back down. But I’m optimistic that this disinflationary trend will continue and we’ll get back closer to 2% a little quicker than maybe others are thinking.”

The current federal funds rate is 4.33% after a series of cuts from the Federal Open Market Committee (FOMC) that  started in September. The FOMC is scheduled to hold its next meeting on interest rates on January 28th.

The Fed is not expected to cut rates at that January meeting, and Waller did little in the interview to dispel that notion. The Fed governor did note that a rate cut in March could not “be completely ruled out,” depending on inflation data.

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