Forex – The “time is right” for the U.S. central bank to begin a round of rate cuts this month, Federal Reserve Deputy Leader Christopher Waller said on Friday.
“If the data supports consecutive cuts, then I believe consecutive cuts are appropriate,” Waller said. “If the data suggests larger cuts are needed, then I will support that as well. I was a big advocate of front-loading rate hikes when inflation accelerates in 2022, and I will be a big advocate of front-loading rate cuts if that’s appropriate.”
The FOMC is expected to lower the policy rate, currently between 5.25% and 5.50%, at its September 17-18 meeting, especially after Fed Chairman Jerome Powell said two weeks ago that “the time has come” to ease policy given the progress in inflation and the cooling in the labor market.
Waller also used the exact same wording, but his words were stronger, signaling he was open to starting rate cuts with a half-percentage point reduction in borrowing costs.
Waller said inflation is currently on track to meet the Fed’s goal, with core inflation, measured by the change in the core personal consumption expenditures price index, running at an annualized six-month average of 2.6% and an annualized three-month average of 1.7%. While the rate cuts starting at the Fed’s next meeting “will be made cautiously in the context of stable inflation as the economy and employment continue to grow, I stand ready to take immediate action to support the economy when necessary,” Waller said.
