Fed Governor Waller backs holding interest rates, citing inflation risks and uncertainty, with possible rate cuts later in 2026
Federal Reserve Governor Christopher Waller said he supports keeping interest rates unchanged as economic risks remain mixed.
His remarks reflect recent shifts in outlook following new data and global developments. He also indicated that policy adjustments later in 2026 remain possible under certain conditions.
Waller Points to Inflation and External Risks
Christopher Waller said weak February jobs data had briefly shaped his earlier thinking.
The report showed slower hiring, which raised concerns about economic strength. This led him to consider whether lower rates might be appropriate.
He later changed his stance as inflation concerns became more prominent. He also cited geopolitical tensions as a factor affecting financial stability.
These risks contributed to his support for holding current policy settings.
Fed Governor Christopher Waller said he was initially open to rate cuts after weak February jobs data, but rising inflation risks and geopolitical uncertainty led him to support holding rates. He added policy is already restrictive, does not favor hikes, and rate cuts could still…
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Waller said the Federal Reserve must assess multiple risks at the same time.
He noted that price pressures remain a key concern. This supports a cautious approach in the current environment.
Current Policy Seen as Restrictive but Stable
Waller described the current rate level as restrictive for economic activity.
He said it is designed to slow demand and control price growth. This reduces the need for further tightening at present.
He also stated that he does not support additional rate increases. The current level is viewed as sufficient under existing conditions.
This position reflects a preference for stability while monitoring economic data. Waller added that holding rates allows policymakers to observe trends more clearly.
He said decisions should be based on consistent data rather than short-term changes. This approach supports measured policy actions.
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Rate Cuts Possible if Conditions Shift in 2026
Waller said future rate cuts remain an option if economic conditions change. He noted that lower inflation would be a key requirement.
A softer labor market would also support such a move. He explained that both elements must develop together for policy easing.
Price levels would need to move closer to the Federal Reserve’s target. Employment data would also need to show reduced strength.
Waller said the Federal Reserve will continue to review incoming information. He noted that policy remains flexible and guided by data.
Future decisions will depend on how economic conditions evolve.
