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Fed's Waller Eyes Rate Cut Amid Labor Market Fears
19 Nov
Summary
- Fed Governor Waller supports a 25 basis point rate cut in December.
- Labor market indicators show weakening, prompting risk management.
- Economic growth is slowing in the second half of 2025.
Federal Reserve Governor Christopher Waller has publicly advocated for a 25 basis point reduction in the FOMC's policy interest rate during the December 9-10 meeting. He cited growing concerns over a deteriorating labor market and decelerating economic growth projected for the latter half of 2025 as primary drivers for this monetary easing.
Waller highlighted several labor market signals, including significantly lower-than-expected job creation in recent months and a decline in job postings. He also noted employer surveys and CEO discussions indicating potential increases in layoffs, partly due to automation advancements, suggesting a tougher job market ahead.
Despite some internal dissent on the FOMC, Waller's stance reflects a cautious approach. He believes that while inflation is near the Fed's target, proactive measures are needed to stabilize employment conditions, differentiating between loosened financial conditions for corporations and tighter ones for households.
