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Waller Says Fed Could Cut Interest Rates as Soon as July
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June 20, 2025
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3:34Now PlayingBloomberg's International Economics and Policy Correspondent Michael McKee breaks down comments from Fed officials following their decision to hold rates steady again.
Federal Reserve Governor Christopher Waller said the central bank can lower interest rates as soon as next month, reiterating his view that the inflation hit from tariffs is likely to be short-lived.
“We could do this as early as July,” Waller said Friday in an interview on CNBC. The Federal Open Market Committee next meets July 29-30 in Washington.
Waller said economic data show GDP growth and inflation are running close to the central bank’s targets. He also said he believes the Fed’s benchmark rate is 1.25 to 1.5 percentage points above the estimated neutral level, at which it would neither slow nor stimulate the economy.
“I think we’ve got room to bring it down, and then we can kind of see what happens with inflation,” he said, adding the central bank could pause cuts if needed due to a shock from events, such as the crisis in the Middle East. “We’ve been on pause for six months to wait and see, and so far the data has been fine.”
Waller’s comments follow the decision by Fed policymakers on Wednesday to keep interest rates on hold for the fourth straight policy meeting. Fed Chair Jerome Powell said officials are bracing for the price hit from President Trump’s tariffs and want to see some of that play out before they lower rates.
Officials also continued to signal their expectation for two rate cuts before the end of 2025, according to their median projection. But seven policymakers signaled they expect no cuts this year, pointing to an apparent split in the committee.
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