Federal Reserve Governor Christopher Waller, a top contender to succeed Jerome Powell as Fed chair in 2026, said Wednesday that the central bank should move quickly to cut interest rates and retain flexibility to adjust its approach in the months ahead, CNBC reported.
Speaking on CNBC’s “Squawk Box,” Waller warned that the economy’s strength can shift rapidly.
“When the labor market turns bad, it turns bad fast. … So for me, I think we need to start cutting rates at the next meeting,” he said. “We don’t have to go into a lock sequence of steps. We can kind of see where things are going because people are still worried about tariff inflation. I’m not, but everybody else is.”
Waller’s comments come ahead of the Federal Open Market Committee’s Sept. 16-17 meeting, where policymakers will decide whether to adjust the current benchmark rate, held steady since July in a range of 4.25% to 4.5%. He was one of two governors who dissented from that decision, marking the first time in more than three decades that two members opposed a committee vote.
He argued that current rates sit roughly 1 to 1.5 percentage points above the “neutral” level, which neither stimulates nor restrains growth.
“I would say over the next three or six months, we could see multiple cuts coming in. Whether it’s like every other meeting, every meeting, we’ll have to wait and see [what] the data says,” Waller said.
Considered among the candidates on President Donald Trump’s short list for the Fed’s top job, Waller has gained attention for challenging the central bank’s recent cautious stance. While he has acknowledged that tariffs function as a tax on consumers and can slow economic growth, he said he does not foresee a recession in the near term.
Waller declined to weigh in on Trump’s attempt to remove fellow board Governor Lisa Cook but underscored the need for the institution to remain free from political pressure.
“The independence of the Fed is critical for everything we do, and there are things that are going on that make people worried, but I still believe that we have an independent Fed,” he said. “People that are appointed will behave that way and act in an apolitical fashion.”
Cook, meanwhile, is fighting her dismissal in court after Trump announced her removal last month. In filings Tuesday, her attorney, Abbe Lowell, argued that the president’s move was based on old information about her mortgage records that had been available during her Senate confirmation.
“A proper hearing would demonstrate that the Government had prior knowledge of the alleged facial contradictions in Governor Cook’s documents well before the President invoked them as the basis for her purported removal,” Lowell wrote.
Trump cited a criminal referral from the Federal Housing Finance Agency that raised mortgage fraud concerns as “cause” for the firing, a standard required under the Federal Reserve Act for removing a board member.
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