Fed’s Waller calls for December rate cut

00:00 Speaker A

Jen, I think the last person to weigh in this morning was Christopher Waller, even though he hasn’t changed his mind lately.

00:06 Jen

Yes. In fact, this Thanksgiving week will be a slower week for the Fed speech. But as you said, we heard from Fed Governor Chris Waller, who said in an interview on Fox Business this morning that he still supports the December rate cut because he sees a softening in the job market. In fact, he thinks we’ll see major downward revisions in the 50 to 60,000 jobs range in the September jobs report. However, he thinks that by January and until next year, the FOMC will meet with a meeting approach because next year, as we enter more real-time data, there will be a flood of data after the Fed’s meeting in December, starting with the November employment report and the November CPI. And he seemed to indicate that if any inflation appeared there, that might give the committee pause. He was also asked about his interviews to become the next Fed chairman. He said he met with Treasury Secretary Scott Bessent about 10 days ago. It went pretty well. He said he would be well suited to the role and would continue to hold press conferences after each FOMC meeting. So this was Chris Waller. In other news, we heard over the weekend from Boston Fed President Susan Collins, who has the right to vote in December. And he reiterated his comment on Friday that he didn’t see a strong need for a rate cut in December, perhaps hinting that he might oppose it if the rest of the Fed voted to cut rates. Of course, no decision has been made yet. But I want to go back to the conversation we had on Friday because that’s when the markets changed course with New York Fed President John Williams saying that he saw the option of a rate cut in the near term and there was room for that option. And that really changed the odds. This again is very critical because he is one of the so-called Troika. He, Chairman Powell and Vice President Jefferson are always aligned. And the fact that he made this speech at a critical time when markets were really divided on what the Fed was going to do. Some analysts this morning suggested that perhaps Powell might have given the New York Fed president, the New York Fed president, permission to do this to send some kind of signal to the markets. Again, this is the comment that has carried the most weight for me over the last few days. As you said, we knew that Fed President Waller supported the interest rate cut for December.