Christopher Waller, a member of the U.S. Federal Reserve Board, said he still supports cutting interest rates but emphasized the need for caution amid mixed economic signals indicating a slowdown in some sectors and continued strength in others.

In an interview with CNBC, Waller stated, “I still think we need to cut interest rates, but we have to be careful about how we do it.”

The Fed official pointed out that the U.S. labor market shows signs of job losses, which could indicate a broader economic slowdown, while GDP continues to register strong growth alongside persistent inflation concerns that remain well above the 2% target.

Waller added, “Something has to change, either the labor market recovers to align with GDP growth, or growth slows to match the weakness in the labor market. In either case, this will affect monetary policy decisions.”

He confirmed his support for lowering interest rates but does not see the need for rapid or aggressive cuts for fear of making a wrong decision amid current uncertainties.

Interest Rate Cuts

The Federal Open Market Committee, responsible for setting interest rates, approved in its September meeting the first rate cut of a quarter percentage point since December 2024, aiming to support the economy amid signs of slowdown in some sectors.

The committee’s quarterly forecast update, known as the “dot plot,” showed most members expect two additional cuts before the end of this year.

Waller said, “He is comfortable with this gradual path of rate cuts,” but does not support accelerating the pace of reductions, noting that rapid moves could carry significant risks if economic indicators change unexpectedly.

In contrast, his new Fed colleague, Stephen Moore, recently appointed by President Donald Trump, called for a larger cut, proposing a half-point reduction instead of a quarter-point, and expressed his desire for the Fed to cut a total of up to 1.25 percentage points more by year-end. (Agencies)