Fed's Waller: Weak job market justifies rate cut in December

Federal Reserve (Fed) Governor Christopher Waller said that the US central bank should cut the interest rates when policymakers meet in December, Bloomberg reported late Monday. Waller added that he's grown concerned over the labor market and the sharp slowdown in hiring.

Key quotes

Makes case for continuing interest rate cuts.

Supports a quarter-percentage-point rate cut at Fed's December 9-10 meeting. 

Will provide additional insurance on labor market. 

Worries restrictive monetary policy is weighing on economy. 

US labor market weak, near stall speed. 

Underlying us inflation is close to 2% target. 

Inflation expectations are well-anchored. 

Tariffs are one-time price level shocks; doesn't see any factors that would cause acceleration in inflation. 

Us gdp growth has slowed in second half of 2025. 

Dour consumer sentiment lines up with reports from firms of slackening demand. 

Affordability of housing, cars poses ongoing challenge for consumers, weighing on spending growth.

Wealth of data paints 'actionable picture' of economy, despite delay in official data. 

Unlikely that any data, including upcoming jobs report, would change view that another rate cut is in order. 

If we saw a rebound in job market, there would be less need for insurance cuts. 

Our balance sheet is pretty much spot on. 

Rates are creeping up in markets, suggesting we are close to scare reserves. 

I don't perceive balance sheet staying where it is, natural reserve demand will push it up. 

Could be as short as a month or couple of months before balance sheet grows again.

On soft data, I've been hearing more and more about plans for layoffs.

We should be paying more attention to labour market than current inflation overshoot.

Declines to comment on whether president trump's remarks on rates are helpful for the Fed.

Hearing that firms are paying for ai investment by not hiring.

Firms say low and middle income households are not spending, hitting hiring.

25 bp rate cut won't get job growth back to where it was.

We might soon see the least group think you've seen from the Fed.

Razor-thin votes can stop people having confidence what the next vote will be.

Neutral level of rates is not clear.

Monetary conditions are loose for corporate America but not for ordinary households. 

Things are not great for lower part of income distribution. 

6% budget deficit is not sustainable in long run but not likely to lead to crisis in next 5 years. 

We haven't seen any market signals of problems from higher budget deficit. 

I would have stopped QE a lot sooner

Financial markets are capable of 'taking a beating.'

I don't expect big changes in fiscal stimulus next year. 

Fed needs a better reason than inflation having been above target for 5 years to not cut rates. 

Business investment is turning down if you exclude AI.

Financial market looseness is not part of my mandate, I'm focused on inflation and labor market. 

Home builders say weak job prospects are stopping buyers. 

Will be hard to judge how accurate October jobs data will be. 

Past experience has made the Fed more wary about 50 bp cuts.