Fed Governor Waller Backs Imminent Rate Cuts, Signaling Policy Shift

WASHINGTON D.C (VINnews) — Federal Reserve Governor Chris Waller said Tuesday he supports cutting interest rates at the central bank’s upcoming meeting, a sign that policymakers may be ready to pivot from their two-year campaign of aggressive tightening.

“We need to start cutting rates at the next meeting,” Waller said in remarks at an economic forum. “Over the next 3–6 months, we could see multiple cuts coming in.”

Waller, one of the more influential voices on the Federal Open Market Committee (FOMC), pointed to easing inflation pressures and slowing economic momentum as reasons to begin reducing borrowing costs.

The Fed has kept its benchmark interest rate at a 23-year high since July 2023, holding steady after raising it to combat the worst inflation in four decades. Inflation has fallen significantly since then, but remains slightly above the Fed’s 2% target.

Waller’s comments mark one of the clearest signals yet that the central bank could move to lower rates as soon as its next policy meeting later this month. Analysts say his remarks are particularly notable given Waller’s reputation as a centrist on the committee, suggesting broader consensus may be building.

Markets reacted swiftly to the comments. Treasury yields slipped, and futures traders increased their bets on a half-point cut in September, according to CME’s FedWatch tool. The S&P 500 also climbed in afternoon trading, with rate-sensitive sectors such as housing and technology leading gains.

“This is the green light investors have been waiting for,” said Diane Swonk, chief economist at KPMG. “If Waller is on board with cuts, it’s likely Chair Powell and others are moving in the same direction.”

Still, some Fed officials have cautioned against moving too quickly. They argue that while inflation has cooled, it remains vulnerable to energy shocks, wage growth, and supply chain disruptions. Cutting rates too soon, they warn, could reignite price pressures.

The Fed’s next meeting is scheduled for September 17–18, when policymakers will release updated economic projections alongside their decision.