Waller Backs December Rate Cut as Jobs Market Weakens

​A Split Fed, and Waller Chooses a Side
Federal Reserve Governor Christopher Waller threw his support behind another rate cut at the upcoming December meeting, signaling growing concern that the labor market is losing momentum faster than expected. His stance puts him firmly in the camp pushing for more easing at a moment when the Fed is increasingly divided.

Several regional Fed presidents have argued against further cuts, warning that inflation could flare back up. Waller isn’t convinced — he says the job market is weakening enough to justify another move now.

“Inflation Isn’t the Threat Here — Jobs Are”
Waller made his case in a speech to economists in London, emphasizing that inflation pressures don’t worry him nearly as much as fading demand for workers. After months of deterioration, he said no upcoming data is likely to change his view that conditions are soft enough to warrant a cut.

He favors a quarter-point reduction, adding that restrictive policy may already be squeezing lower- and middle-income consumers harder than the Fed intended.

Shutdown Data Gap Doesn’t Shake His Outlook
Although the government shutdown halted nearly all official economic releases, Waller pushed back on the idea that the Fed is “flying blind.” He argued that private-sector indicators still paint a clear enough picture: consumers are strained, hiring is cooling, and demand is slowing.

That combination, he said, calls for a cautious but supportive stance to prevent the labor market from slipping further.

Other Officials Urge Patience
Waller’s confidence in cutting contrasts with a more cautious tone from other Fed leaders. Vice Chair Philip Jefferson urged policymakers to “proceed slowly,” while Boston Fed President Susan Collins said she sees a “high bar” for more easing.

Even within Waller’s own cohort, opinions differ. Governor Stephen Miran — also appointed by President Trump — had previously pushed for even larger cuts of half a percentage point.

The Stakes for December
The Fed meets December 9–10, and the decision is shaping up to be one of the most contentious of the year. With inflation cooling but job growth weakening, the central bank is navigating a delicate balance.

​For Waller, the choice is clear: cut now to bolster the labor market and steer policy closer to neutral. For others, the risk of doing too much still looms. The only thing certain heading into December is that the debate is far from settled.