Fed Governor Waller Reaffirms Support for September Rate Cut

Federal Reserve Governor Christopher J. Waller, who cast one of two dissenting votes at the July meeting of the Federal Open Market Committee, reiterated his support for a reduction in the central bank’s benchmark interest rate. Speaking Thursday evening at the Economic Club of Miami, Waller said, “Since I last spoke on the economy and monetary policy on July 17, economic data have reinforced my view of the outlook and my judgment that the time has come to ease monetary policy and move it to a more neutral stance.”

Waller told attendees he expects the August nonfarm payrolls report due on Sept. 5 to be weak. He pointed to “weakening” demand in the labor market and noted that Bureau of Labor Statistics revisions suggest the economy may have lost jobs over the past few months.

Accordingly, Waller reaffirmed his call for a 25-basis-point cut to the effective federal funds rate at the September meeting.  “While I believe we should have cut in July, I am still hopeful that easing monetary policy at our next meeting can keep the labor market from deteriorating while returning inflation to the FOMC’s goal of 2%,” he said Thursday. “So, let’s get on with it.”