Federal Bank Board Member Christopher Waller Evaluates Economic Outlook and Policy

Federal Reserve Board Member Christopher Waller spoke at the Brookings Institution, offering his assessments of the economic outlook.

Expressing confidence in the correctness of the current monetary policy, Waller stated that the policy needs to continue putting downward pressure on demand to maintain moderate inflation readings.

Waller expressed his belief that they are on the right path to reach the 2% inflation target, stating, “I believe that, as long as inflation does not rise and stay high, the Federal Open Market Committee (FOMC) could lower the federal funds rate target range this year.”

Assessment of Inflation and Labor Market

Waller pointed out that time will tell whether inflation will continue its recent trend and whether the labor market will still outperform expectations. He noted that the recent data allows for the Committee to consider lowering the policy rate by 2024.

“Policy Changes Should Be Carefully Adjusted and Not Rushed”

Expressing concerns about the sustainability of the data trends, Waller emphasized the need for policy changes to be “carefully adjusted and not rushed.”

Waller highlighted that the timing and number of rate cuts in 2024 will depend on the incoming data, stating, “When the time comes to start cutting rates, I believe it can and should be done in a methodical and careful manner.”

In this cycle, Waller stated that he did not see a reason for moving as quickly as in the past or for making rapid cuts, with economic activity and labor markets in good shape and inflation gradually declining to 2%.

Christopher Waller also emphasized the need for more careful policy-making to prevent excessive tightening in the future.