Even with some evidence that inflation is cooling, Federal Reserve Governor Christopher Waller said he needs to see broader data over “at least a couple more months” before he will be on board with interest rate cuts. The higher-than-anticipated inflation readings for January could “just be a bump in the road, but it also may be a warning that the considerable progress on inflation over the past year may be stalling,” he said.
Waller, who is a permanent voting member on the Federal Open Market Committee, said he expects the committee to begin lowering rates during 2024 at some point because of the belief that inflation will get down to the Fed’s 2% goal. However, he noted that there isn’t significant indication that inflation will fall below 2%.
“That makes the decision to be patient on beginning to ease policy simpler than it might be,” Waller said. “I am going to need to see at least another couple more months of inflation data before I can judge whether January was a speed bump or a pothole.”
Earlier on Thursday, Fed Vice Chair Philip Jefferson did not make definitive statements on potential rate cuts, instead saying that he expects it to happen “later this year.”
