But Waller doesn’t support a March rate reduction

Federal Reserve Governor Christopher Waller said he wouldn’t support lowering interest rates in March, but sees room to cut two, or possibly three, times this year.

“If the labor market, everything, seems to be holding, then you can just kind of keep an eye on inflation,” Waller said Thursday at the Wall Street Journal CFO Network Summit. “If you think it’s moving back towards target, you can start lowering rates. I wouldn’t say at the next meeting, but could certainly see going forward.”

After lowering rates by a percentage point in the closing months of 2024, Fed officials held their benchmark steady in January and are widely expected to remain on hold when they gather March 18—19 in Washington. Several policymakers have indicated they want to see more progress on lowering inflation before cutting rates again.

Waller repeated his assessment that the impact on inflation from tariffs likely wouldn’t be significant.

Employment data due Friday is expected to show job creation picked up and the unemployment rate held steady in February, according to a Bloomberg survey of economists.

Waller doesn’t support a March rate reduction

by Amara Omeokwe

Federal Reserve Signals Potential Rate Cuts in 2025

The Federal Reserve’s approach to interest rates remains a critical focus for the economy, and recent remarks from Federal Reserve Governor Christopher Waller suggest a positive outlook for rate cuts this year. While he does not support an immediate reduction in March, Waller sees room for two or possibly three rate cuts in 2025, signaling potential relief for borrowers and businesses.

At the Wall Street Journal CFO Network Summit, Waller emphasized that while the labor market remains strong, the Fed is closely watching inflation trends. His comments indicate that if inflation continues to decline toward the Fed’s target, we could see gradual rate cuts later in the year to support economic growth.

Following a one-percentage-point rate cut in the final months of 2024, the Federal Reserve held rates steady in January 2025, with expectations to maintain the same course at the upcoming March meeting. However, policymakers are keeping the door open for reductions as economic conditions evolve.

Key Economic Indicators to Watch

A major factor influencing the Fed’s decision-making is the labor market, with upcoming employment data expected to show steady job creation and a stable unemployment rate. Additionally, Waller reiterated that tariffs are unlikely to significantly impact inflation, reinforcing confidence in the current economic outlook.

What This Means for You

While a March rate cut is unlikely, Waller’s comments suggest a strong possibility of multiple rate reductions in 2025. For homebuyers, businesses, and investors, this could translate to lower borrowing costs, increased affordability, and new opportunities for economic expansion.

As the year progresses, staying informed on inflation trends and Federal Reserve policy decisions will be crucial. The potential for two or three rate cuts is an encouraging sign that the economy is on a sustainable path forward, offering financial relief and growth opportunities in the months ahead.