Top Fed Official Stands Out: Advocates for Rate Hike This Month Despite Colleagues’ Opposition | CNN Business

A Federal Reserve official recently made headlines by advocating for an interest rate cut. This comes despite a resilient U.S. economy, with many central bankers preferring to keep rates steady for now.

Fed Governor Christopher Waller spoke in New York, suggesting that the rates should be lowered at the upcoming policy meeting on July 29-30. He believes that lowering rates would help maintain a healthy labor market. “With inflation near our target and limited risks, we shouldn’t wait for the labor market to worsen before making a cut,” Waller said. He proposed a reduction of 25 basis points, roughly a quarter of a percentage point.

Waller’s views starkly contrast with those of other central bankers. Most prefer a wait-and-see approach to assess how tariffs from the Trump administration impact prices. Currently, the odds of a rate cut in July appear low, based on futures market predictions.

For instance, Fed Governor Adriana Kugler expressed that maintaining steady rates might be wise since inflation has risen due to tariffs. She also pointed out recent job stability, which reinforces this decision.

In June, the U.S. economy added 147,000 jobs, and the unemployment rate dipped to 4.1%. These figures outperformed expectations, indicating a robust job market. However, Waller people fear may not be as secure as it seems, arguing it’s essential to look at core inflation, which is nearing the Fed’s goal of 2%.

Waller cautioned against waiting too long. “We need to act before things deteriorate,” he explained. He previously supported a rate cut, but with unexpected strength in job and retail markets, and inflation rebounding, the Fed might hesitate.

Last month, Fed Vice Chair Michelle Bowman hinted that rate cuts could start as soon as July. However, she hasn’t reinforced that idea after recent positive economic data. Most economists believe recent numbers don’t necessitate a cut. Additionally, expectations about rising prices from tariffs have led to a cautious approach by the Fed.

President Trump has not been pleased. He has criticized the Fed for not reducing rates, and he sees potential grounds for removing Chairman Jerome Powell over a costly renovation project at the Fed.

The debate over interest rates showcases the challenge of balancing a strong job market with rising prices. As the situation develops, many will closely watch for any changes that might impact the economy.

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