During a Federal Reserve Bank of Dallas event, Christopher Waller commented that the Fed is maintaining a policy that is too restrictive and that they could consider an interest rate adjustment this month. He also stated that the current monetary policy rate remains restrictive.
His statement follows the release of the July FOMC minutes, which show that committee members are cautious about the possibility that Trump's tariffs could lead to increased inflation. However, Waller reiterated that the U.S. Central Bank should assess the impact of tariffs on prices and possibly push for a Fed rate cut.
This is not the first time the Federal Reserve governor has called for a rate cut in July. Last month, just days after the June FOMC meeting, he stated that a rate cut could happen even this month. Waller opined that they are in a good position to cut rates, as inflation no longer poses a threat.
His statement aligns with that of President Trump, who has persistently urged Federal Reserve Chairman Jerome Powell to cut rates. Trump recently pushed for a 300 basis point Federal Reserve rate cut. He urged the Federal Reserve to lower rates quickly, as there is no inflation.
He also alluded to how the price of Bitcoin and the stock market are reaching new all-time highs (ATH) to highlight the strength of the market. The president added that the Fed should lower rates to reflect this strength.
Despite calls for a Fed rate cut, Powell continues to insist that the U.S. economy is in a good position, allowing them to wait and see the impact of tariffs on inflation. Trump has even called for Powell's resignation due to his reluctance to cut rates.
Interestingly, Waller has emerged as one of the potential candidates to replace Powell, although Polymarket data shows there is a 6% chance of that happening.
