Story perspectives

Fed's Waller Backs July Rate Cut Amid Economic Slowdown

7/18/2025

33 4

Summary

Waller Advocates Rate Cut

Fed Governor Christopher Waller supports a July rate cut due to a slowing labor market and low inflation from tariffs.
He advocates for a data-driven monetary policy, asserting tariffs shouldn't cause lasting inflation.
Recent job reports indicate stalling private-sector growth, raising economic momentum concerns.
Market confidence in a September rate cut has risen, now at a 54% probability.
The Fed will prioritize wage growth and tariff impacts on inflation in upcoming decisions.

Summary

Trump Pressures Fed

President Trump urges Fed Chair Jerome Powell to lower interest rates, sparking worries over Fed independence.
Trump considered firing Powell but later called it "highly unlikely."
Fed officials stress the need for independence to mitigate inflation risks.
Trump criticizes $2.5 billion renovation costs for Fed buildings, alleging mismanagement.
Analysts caution that political pressure on the Fed may cause long-term economic instability.

History

Historical Context

In the late 1970s, the U.S. faced severe inflation, prompting Federal Reserve Chairman Paul Volcker to raise interest rates sharply, peaking at 20% in June 1981. This move aimed to stabilize the economy. Today, Fed Governor Christopher Waller's support for a rate cut highlights ongoing inflation concerns, echoing historical tensions between monetary policy and political influence, particularly from figures like President Trump.

1 of 3

Waller Advocates Rate Cut

Fed Governor Christopher Waller supports a July rate cut due to a slowing labor market and low inflation from tariffs.
He advocates for a data-driven monetary policy, asserting tariffs shouldn't cause lasting inflation.
Recent job reports indicate stalling private-sector growth, raising economic momentum concerns.
Market confidence in a September rate cut has risen, now at a 54% probability.
The Fed will prioritize wage growth and tariff impacts on inflation in upcoming decisions.

1 / 3