Governor Christopher Waller thinks that waiting for economic uncertainty to clear is a recipe for policy paralysis and that the Federal Reserve would act based on incoming data rather than external noise. While recent economic indicators support keeping interest rates steady, he thinks that if inflation trends mirror 2024, policymakers could resume rate cuts at some point this year. Despite the uncertainty introduced by the new Trump administration’s trade policies, Waller expects that monetary policy will not be delayed in response. Waller expects that the administration’s tariffs are expected to have a modest, non-persistent impact on inflation, but he cautioned that price pressures could exceed expectations. He also pointed to other policy measures under discussion that could enhance supply conditions and help contain inflation. Describing the broader economy as solid with a labour market in a sweet spot, Waller underscored the Fed’s commitment to data-driven decisions, reinforcing that rate moves will depend on how inflation evolves rather than speculation or external pressures..Data
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