A top official at the US Federal Reserve, Christopher Waller, indicated on Friday that the central bank should consider lowering interest rates as soon as July—a position that closely aligns with President Donald Trump’s repeated calls for cheaper borrowing costs, CNN reports.
In an interview with CNBC, Waller, who sits on the Fed’s Board of Governors, said that while Trump’s recently imposed tariffs on imported goods could cause a temporary increase in inflation, the central bank should “look through these type of price shocks,” describing them as likely “one-off” events.
“We’re in a good spot right now for talking about bringing the rate down,” Waller said.
Waller’s remarks stopped short of endorsing the sharp rate cuts Trump has demanded, instead suggesting that the Fed “start slow” with any reductions.
For months, President Trump has criticized Fed Chair Jerome Powell and the central bank for not moving quickly enough to reduce rates, arguing that the US is falling behind other major economies and that high interest rates are burdening the federal government with large debt payments. Trump has gone as far as to call for the equivalent of ten quarter-point rate cuts, or a total reduction of 2.5 percentage points.
However, Fed officials, including Powell, have consistently emphasized that their decisions are based on economic conditions—not on government finances or political considerations. Powell reiterated this stance at a recent press conference, noting the Fed’s dual mandate from Congress: to maintain price stability and maximize employment. Powell said the Fed wants to monitor how Trump’s policies, particularly tariffs, affect the broader economy before taking action on rates.
While overall inflation has remained relatively subdued and the labor market is still in decent shape, Waller pointed to signs of softening, such as higher youth unemployment, as reasons to consider cutting rates soon.
“Maybe the labor market is starting to soften more than we might want it to… so you’re starting to worry about the downside risks to the labor market,” Waller said, arguing in favor of acting preemptively. “Move now, don’t wait. Why do we want to wait until we actually see a crash before we start cutting rates?”
Waller’s comments come as President Trump considers who will lead the Fed when Powell’s term expires in May 2026. Trump has said he will announce his nominee “very soon,” raising the prospect of a “shadow” Fed chair months before the current chair’s term ends—an unprecedented move in the institution’s history. Waller, who was appointed to the Fed by Trump in 2020, is widely seen as a possible contender for the top job.
