FED: Waller Sees Rate Cuts As Early As July, Pushing Back On Powell

Gov Waller (permanent voter), one of the most dovish members of the FOMC, is speaking on CNBC and is in firm contrast to Fed Chair Powell from Wednesday’s press conference. Waller was already seen as a good bet of being one of the two dots looking for three cuts in what’s left of this year. 

Bloomberg headlines:

• "*FED'S WALLER: COULD CUT RATES AS EARLY AS JULY MEETING
• *WALLER: DON'T THINK WE NEED TO WAIT MUCH LONGER TO CUT RATES
• *WALLER: IMPORTANT FOR TO LOOK THROUGH TARIFFS INFLATION IMPACT
• *WALLER: FED COULD PAUSE RATE CUTS IF THERE'S SOME BIG SHOCK
• *WALLER: LABOR MARKET IS OK BUT NOT STRONG LIKE IN 2022
• *WALLER: DON'T WANT TO WAIT FOR CUTS UNTIL JOB MARKET TANKS
• *FED'S WALLER: HAVEN'T SEEN BIG TARIFF SHOCK TO INFLATION
• *WALLER: JUST DON'T SEE SECOND-ROUND TARIFF INFLATION EFFECTS
• *WALLER: INFLATION PERSISTENCE FROM TARIFFS IS A VALID CONCERN" – all Bloomberg

Recall that Powell was far from emphatic about the prospect of rate cuts, all but taking a cut at the July meeting off the table. "It's very, very hard to say when that will happen. We know the time will come. It could come quickly. It could not come quickly. As long as the economy is solid, as long as we're seeing the kind of labor market that we have and reasonably decent growth, and inflation moving down, we feel like the right thing to do is to be where we are, where our policy stance is, and learn more. And in particular we feel like we're going to learn a great deal more over the summer on tariffs."