Federal Reserve Chairman candidate Waller: There is a risk of continued slowdown in employment, and the Federal Reserve should continue to cut interest rates in December

On Friday local time, Federal Reserve Governor Christopher Waller stated that given the risks of a continued slowdown in employment, the Federal Reserve should continue to cut interest rates at its next meeting in December.

In a media interview on Friday, Waller said, "Our biggest concern right now is the labor market. We know inflation will come down, so I still advocate for a rate cut in December because all the data suggests we should do so."

Earlier, several Federal Reserve officials issued statements on Friday opposing the rate cut decision made earlier this week, citing that inflation risks remain. Waller's remarks were made against this backdrop. The Federal Reserve lowered the benchmark interest rate by 0.25 percentage points for the second consecutive month on Wednesday to address the sharp slowdown in the labor market over the summer.

Federal Reserve Chairman Jerome Powell warned during the press conference following the rate cut decision that whether there will be another rate cut at the next meeting in December is not a foregone conclusion, far from it.

Waller downplayed the risk of rising inflation due to President Trump's tariff policies. He stated:

"If we exclude what we estimate to be the possibly temporary effects of tariffs, the inflation rate—measured by the Personal Consumption Expenditures Price Index (PCE) we focus on—is about 2.5%. So yes, it hasn't reached 2%, but it's not too far off, and we expect it to decline."

Waller was appointed to the Federal Reserve Board by Trump in 2020 and is one of five candidates being considered for the position of Federal Reserve Chairman, which Powell's term will expire in May.

Earlier this year, Waller began advocating for rate cuts earlier than most of his colleagues—he believes tariffs only lead to a one-time increase in prices, and the Federal Reserve should prioritize employment risks—and he voted against the majority decision to maintain interest rates in July.

Regarding the possibility of being a candidate for Federal Reserve Chairman, Waller said, "If the president needs me, I will not refuse. He asked me once before, and I agreed. If he asks me again, I will agree again."