Fed's Waller: FOMC should cut interest rates by 25 bps at the July meeting

Federal Reserve Governor Christopher Waller said late Thursday that he continues to believe that the Fed should cut its interest rate target at the July meeting, citing mounting economic risks and the strong likelihood that tariff-induced inflation will not drive a persistent rise in price pressures, per Reuters.

Key quotes

The Fed should cut interest rates 25 basis points at July meeting.
Rising risks to economy favour easing policy rate.
If underlying inflation remains in check and growth tepid, more cuts needed.
The Fed should not wait until labour market hits trouble before cutting rates.
Delaying cuts runs risk of need for more aggressive action later.
Evidence mounting that labour market is growing weaker.
Tariffs likely to have one-time impact the Fed can look through.
July rate cut could give the Fed space to hold rates for a few meetings.
Absent tariff impact, inflation is close to the Fed's 2% target.
Tariffs will boost inflation in the near term.
Risks include an economic slowdown with GDP around 1%.
Economy calls for monetary policy closer to neutral setting.
Expects tariff impact to fade next year.
Data suggests job market 'on the edge.'
Upside risks to inflation are limited.
Sustained 10% tariff likely to increase inflation 0.75%-1% this year.
Private sector hiring 'near stall speed.'

Market reaction

At the time of writing, the US Dollar Index (DXY) is trading 0.14% lower on the day to trade at 98.52.