Fed Governor Waller Backs 'Rate Cut'…"No Need to Rush"

JOON HYOUNG LEE

Summary

Christopher Waller of the U.S. Federal Reserve said he supports additional cuts to the policy rate.
Waller said the current policy rate is up to 1 percentage point above the neutral rate and indicated the possibility of a gradual cut.
However, Waller emphasized that inflation remains high, so there is no need to rush a rate cut.

*Christopher Waller, a member of the U.S. Federal Reserve (Fed), is speaking at a CNBC forum on the 17th (local time). Photo=CNBC*

Christopher Waller, a member of the U.S. Federal Reserve (Fed), has come out in support of additional cuts to the policy rate.

Waller said at a CNBC forum on the 17th (local time), "The current policy rate is up to 1 percentage point higher than the neutral rate," and added, "The policy rate can be gradually lowered to a neutral level." The neutral rate is the real interest rate the Fed ideally regards as not increasing inflation while maximizing employment. Waller's remarks can be read as a message that further rate cuts are effectively necessary.

However, Waller stressed, "There is no need to rush." Waller said, "Because inflation is still high, we can take time rather than rushing a cut."

Meanwhile, Waller is one of the people mentioned as a candidate for the next Fed chair. Waller is scheduled to be interviewed by U.S. President Donald Trump that day. In response to questions about the Fed's independence, he said, "I have studied the independence and importance of central banks for 20 years," expressing his intention to maintain independence.

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