Federal Reserve Bank Governor Christopher Waller, during a speech at The Economic Club of Miami, once again pledged his vote for a rate cut at the next Federal Open Market Committee (FOMC) meeting, while noting his concerns about the labor market.
Citing weakening job growth, tariff pressures and rising risks to the labor market, Waller said he would vote for a 25-basis-point rate cut at the September 16-17 meeting.
“While there are signs of a weakening labor market, I worry that conditions can deteriorate further and quite rapidly, and I think it is important that the FOMC not wait until such a deterioration is underway and risk falling behind the curve in setting appropriate monetary policy,” he explained.
Though the FOMC should have started to cut rates in July, added Waller, he doesn’t think cutting by more than a quarter point is needed in September.
“Now, that view of course could change if the employment report for August…points to a substantially weakening economy and inflation remains well contained,” he said. “I don’t believe that policy has fallen substantially behind the curve, but one way to signal that I don’t intend to allow that to happen is to talk about where we go after September.”
Looking ahead, Waller said he anticipates additional rate cuts in the next three to six months, driven by the incoming data.
Focusing on the job data, Waller pointed out that the past three consecutive months have shown weak job creation data.
Touching on the “quality of the payroll data,” following the firing of the head of the Bureau of Labor Statistics, Erika McEntarfer, Waller said that, considering how important this data is, “it is entirely appropriate to examine the quality of the jobs numbers and process by which they are collected.”
