Fed Governor Waller on Rate Cuts

CNBC reports Fed Governor Waller Says Central Bank Could Cut Rates as Early as July.

Federal Reserve Governor Christopher Waller said Friday that he doesn’t expect tariffs to boost inflation significantly so policymakers should be looking to lower interest rates as early as next month.

“I think we’re in the position that we could do this as early as July,” Waller said during a “Squawk Box” interview with CNBC’s Steve Liesman. “That would be my view, whether the committee would go along with it or not.”

“If you’re starting to worry about the downside risk [to the] labor market, move now, don’t wait,” he said. “Why do we want to wait until we actually see a crash before we start cutting rates? So I’m all in favor of saying maybe we should start thinking about cutting the policy rate at the next meeting, because we don’t want to wait till the job market tanks before we start cutting the policy rate.”

Fed’s Bowman Open to Cutting Rates at July Policy Meeting

Reuters reports Fed’s Bowman Open to Cutting Rates at July Policy Meeting

Federal Reserve Vice Chair for Supervision Michelle Bowman, recently elevated by President Donald Trump as the central bank’s top bank overseer, said Monday the time to cut interest rates appears imminent as she is growing more worried about labor market risks and less concerned high import taxes will cause an ongoing inflation problem.

Bowman said inflation appears to be on a sustained path back to 2% and she said she expects “only minimal impact” on inflation from trade policy. “Should inflation pressures remain contained, I would support lowering the policy rate as soon as our next meeting in order to bring it closer to its neutral setting and to sustain a healthy labor market,” Bowman said.

Bowman also said Trump’s policy mix is likely to have a positive impact on the outlook. “Less restrictive regulations, lower business taxes, and a more friendly business environment will likely boost supply and largely offset any negative effects on economic activity and prices,” Bowman said.

Bowman’s openness to cutting rates soon is joined by that of Fed Governor Christopher Waller, who said in a television interview Friday he’d also consider a rate cut at the July 29-30 meeting. Waller is widely considered to be in the running to succeed Fed Chair Jerome Powell, whose term ends next year.

A Goldman Sachs economist said in a note that the next few months will be telling for the price pressure outlook, telling clients in a note Monday that “we expect the largest tariff effects on monthly inflation to show up from June through August.”

Trump’s Rants

Donald J. Trump – Truth Social: June 18, 2025, 11:56 PM

Too Late—Powell is the WORST. A real dummy, who’s costing America $Billions!

Donald J. Trump – Truth Social: June 19, 2025, 10:04 AM

“Too Late” Jerome Powell is costing our Country Hundreds of Billions of Dollars. He is truly one of the dumbest, and most destructive, people in Government, and the Fed Board is complicit. Europe has had 10 cuts, we have had none. We should be 2.5 Points lower, and save $BILLIONS on all of Biden’s Short Term Debt. We have LOW inflation! TOO LATE’s an American Disgrace!

Donald J. Trump – Truth Social: : June 20, 2025, 5:58 PM

 “Too Late” Powell complains about costs, much of which were produced by the Biden Fake “Government,” but he could do the biggest and best job for our Country by helping to lower Interest Rates and, if he reduced them to the number they should be, 1% to 2%, that “numbskull” would be saving the United States of America up to $1 Trillion Dollars per year. I fully understand that my strong criticism of him makes it more difficult for him to do what he should be doing, lowering Rates, but I’ve tried it all different ways. I’ve been nice, I’ve been neutral, and I’ve been nasty, and nice and neutral didn’t work! He’s a dumb guy, and an obvious Trump Hater, who should have never been there, I listened to someone that I shouldn’t have listened to, and Biden shouldn’t have reappointed him. We have virtually No Inflation, our Economy is doing really well, and will soon be doing, with the tremendous Tariff Income coming in, and Factories being built all over the Country, better than it has ever done before. If he was concerned about Inflation or anything else, then all he has to do is bring the Rate down, so we can benefit on Interest Costs, and raise it in the future when and if these “other elements” happen (which I doubt they will!).  Don’t say that you think there will be Inflation sometime in the future, because there isn’t now but, if there is, raise the Rates! We should be at the TOP of the attached List, not the bottom. I don’t know why the Board doesn’t override this Total and Complete Moron! Maybe, just maybe, I’ll have to change my mind about firing him? But regardless, his Term ends shortly!

Howard Lutnick Secretary of Commerce

June 20, 2025 X

The United States of America is the greatest country in the world yet it has to suffer with the highest interest rates of any first class country. Our Federal Reserve Chair is obviously afraid of his own shadow. What was really sad about Powell’s comments is that he stated that tariffs contributed to “price increases in some of the relevant categories, like personal computers.” You would think Powell would know that there are no tariffs on personal computers. They currently don’t exist. Semiconductors and computer tariffs come out after the Commerce Department finishes its analysis. These high Interest Rates make no sense. Enough is enough!!!

Bill Pulte U.S. Director of Federal Housing FHFA

June 21, X: Wells Fargo and Tom Lee are now disagreeing with the Federal Reserve Chairman, Jerome Powell, on his fanciful (no data) claims of an inflation shock. Powell must resign.

Bill Pulte U.S. Director of Federal Housing FHFA

June 23, 2025 X: With momentum building for Powell’s immediate resignation and with Federal Reserve Governors Waller and Bowman’s data-driven statements supporting Rate Cuts, it is clear that Powell’s political bias against our great President needs to be looked at.

Call to Resign

Federal Housing Finance Agency Director Bill Pulte calls for Jerome Powell to resign. pic.twitter.com/S3JotAmYue

— Mornings with Maria (@MorningsMaria) June 20, 2025

My Reply to Pulte

Dear @pulte it's time we get rid of Fannie, Freddie, HUD, and the FHFA, along with parasites like you. https://t.co/8ycw93r8NS

— Mike "Mish" Shedlock (@MishGEA) June 23, 2025

Powell Appears Before Congress this Week

This week, Federal Reserve Chair Jerome Powell will head to Congress for two days of hearings as required under the Humphrey–Hawkins Act.

Powell meets the House Financial Services Committee on Tuesday and the Senate Banking Committee on Wednesday.

Powell is likely to face questions about the Fed’s recent decision to hold interest rates steady, potential impacts of the US involvement in the Israel-Iran conflict on the economy, and the Fed’s independence from political influence.

Tense Meetings

The meetings are likely to be tense because on top of Trump’s taunts, two Fed governors are discussing cuts.

Also FHFA director Bill Pulte calls on Powell to resign and Howard Lutnick, the Secretary of Commerce says “Powell is obviously afraid of his own shadow.“

Unprecedented Attack on Fed’s Independence

Some small amount of pressure on the Fed from the President is normal. However, this is an unprecedented attack, with unprecedented language, from unprecedented administration officials including the President.

Trump has also discussed firing Powell and naming a replacement early.

Powell’s term as the Chair of the Board of Governors of the Federal Reserve System ends on May 15, 2026. His term as a member of the Board of Governors ends on January 31, 2028.

If Trump fired Powell, the Supreme Court has already indicated it would side with the Fed. That’s the only reason Trump is unlikely to do it. But no one can say for sure because Trump acts out of anger and can easily be goaded into reacting.

Powell has about 11 months remaining. To undercut Powell, Trump could name a vocal replacement early.

Christopher Waller and Michelle Bowman are the obvious candidates. There is only one real qualification for the job now. Do what Trump wants.

End the Fed

I fully endorse ending the Fed, but with one proviso. End the Fed and replace it with nothing. The free market can set rates.

The one thing worse than a clueless Fed is a central bank run by government nannycrats. And that includes Trump.

Trump is economically clueless. But even if you disagree, making the Fed subservient to the President means that someday someone like Elizabeth Warren, Joe Biden, or Kamala Harris will be setting interest rates.

As long as we are going to have a Fed, it needs to be independent. That makes Trump wildly out of control. And so are Pulte and Lutnick.

In Defense of a Clueless Fed

I am in the uncomfortable position of defending a Fed that I think is clueless.

However, Trump is not only economically clueless, but recklessly unpredictable. No one can say what Trump’s tariff policy or deportation policies will ultimately be or how the market and consumers will react to that.

Stagflation is not out of the question nor is a deflationary collapse. Regardless, a quarter-point cut will not make a difference.

Related Posts

June 18, 2025: Fed Projects Higher Unemployment and Higher Inflation Citing Tariffs

The Fed’s outlook has soured vs its March forecast. “We expect a meaningful rise in inflation in the coming months,” said Powell.

June 21, 2025: Record Deficits as Far as the Eye Can See and Trump Begs for More

Let’s investigate CBO deficit projections vs what actually happened.

June 20, 2025: Did the Fed Just Predict a Recession for Later this Year?

The Fed does not “predict”, but its GDP projections say “yes”.

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