London: A key Federal Reserve official expressed support for a third consecutive interest rate cut by the US central bank in December, citing persistent weaknesses in the jobs market. Fed Governor Christopher Waller, speaking at a dinner event in London, emphasized the need for action as labor market conditions remain fragile and are nearing a stall.
According to Bangladesh Sangbad Sangstha, Waller highlighted that despite the upcoming September jobs report and other forthcoming economic data, his stance remains firm on the necessity of another rate cut. Waller, who is regarded as a potential successor to Fed Chair Jerome Powell when his term concludes in May 2026, noted the shift in business strategies from a “no hire, no fire mode” to planning for potential layoffs.
Waller advocated for a December rate cut as a preemptive measure to safeguard against further deterioration of the labor market, proposing an additional 25 basis points reduction. This would follow consecutive rate cuts in September and October, after a period of stability earlier in the year. However, Fed Chair Powell recently stated that a December cut is not guaranteed.
Emphasizing a strategy of “risk management,” Waller underscored the current fragility of the labor market. He also addressed the impact of President Donald Trump’s tariffs, suggesting they are having a temporary effect rather than being a persistent inflationary force.
Waller pointed out that while the stock market’s strength benefits a select group of consumers, it does not accurately reflect the broader financial conditions facing most Americans, posing a potential vulnerability to the economy. He projected that real GDP growth has likely decelerated in the second half of 2025, even when accounting for the temporary effects of the extended US government shutdown.
In contrast, Fed Vice Chair Philip Jefferson offered a more cautious perspective, advocating for a gradual approach to rate adjustments due to the evolving balance of risks in the economy.