Federal Reserve Governor Christopher Waller said Monday he is advocating for an interest-rate cut at the central bank’s December policy meeting, citing continued softness in the labour market and suggesting the Fed could take a more flexible, meeting-by-meeting approach beginning in January.
In an interview with Fox Business Network, Waller said labour market conditions had become his primary concern within the Fed’s dual mandate.
“My concern is mainly labour market, in terms of our dual mandate. So I’m advocating for a rate cut at the next meeting,” he said.
He added that once the Fed moves past December, “you may see a more of a meeting-by-meeting approach once you get to January.”
Investors currently assign roughly a 70% probability to a cut at the Dec. 9–10 meeting, according to futures contracts.
But policymakers remain divided over whether additional easing is appropriate, with some members emphasising inflation risks and others pointing to cooling labour conditions and slowing momentum in parts of the economy.
Data delays complicate the policy outlook
Waller noted that the Fed’s decision could prove “a little trickier,” in part because a wave of delayed economic data — including employment figures for October and November — will be published only after the December gathering.
The jobs reports are scheduled for release on Dec. 16, followed two days later by consumer price data for November.
“If it suddenly shows a rebound in inflation or jobs, or the economy’s taking off, then it might give concern,” he said.
Still, he added, “I still don’t think the labor market is going to turn around in the next six weeks to eight weeks.”
Waller is also under consideration as a potential successor to Jerome Powell as Fed chair next year.
He said he had a “great meeting” with Treasury Secretary Scott Bessent, who is overseeing the selection process.
“He and I seem to hit it off very well, talking about economics, the economy, financial markets,” Waller said, adding that the discussions were focused on economics rather than politics.
Williams also signals openness to December cut
Waller’s remarks followed comments from New York Federal Reserve President John Williams, who last week signalled that the central bank may have room to cut interest rates again in December.
Speaking in Chile, Williams said risks to the labour market now outweigh inflation risks, aligning him with the more dovish members of the Federal Open Market Committee.
“I view monetary policy as being modestly restrictive, although somewhat less so than before our recent actions,” he said, adding that he sees “room for a further adjustment in the near term to the target range for the federal funds rate to move the stance of policy closer to the range of neutral.”
Together, the remarks from Waller and Williams underscore the growing focus on labour market fragility as policymakers weigh their next move in a highly uncertain economic landscape.
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