US Federal Reserve Governor Christopher Waller says multiple rate cuts are possible in the first half of the year.
In a new interview with CNBC, Waller notes that recent data suggests inflation is falling.
“If we continue to get these kinds of numbers, it’s reasonable to think that interest rate cuts could happen in the first half of the year…
It depends on whether – always the big word ‘if’ – the inflation figures continue to come in as before. If we don’t do that, if we get a surprise like last year, we will have to wait for inflation to fall again. But I am optimistic that this disinflationary trend will continue and we will get back closer to 2% a little sooner than others might think.”
The current federal funds rate is 4.33%, following a series of cuts by the Federal Open Market Committee (FOMC) that started in September. The FOMC will hold its next interest rate meeting on January 28.
The Fed is not expected to cut rates at its January meeting, and Waller did little in the interview to dispel that idea. The Fed governor noted that a rate cut in March cannot be “completely ruled out,” depending on inflation data.
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