Fed Governor Waller says central bank could cut rates as early as July
Federal Reserve Governor Christopher Waller said Friday that he doesn't expect tariffs to boost inflation significantly so policymakers should be looking to lower interest rates as early as next month.
In a CNBC interview, the central banker said he and his colleagues should move slowly but start to ease as inflation is now longer a major economic threat.
"I think we're in the position that we could do this and as early as July," Waller said during a "Squawk Box" interview with CNBC's Steve Liesman. "That would be my view, whether the committee would go along with it or not."
.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Insider
18 minutes ago
- Business Insider
A Fed governor just gave Trump fresh hope in his fight against the central bank
President Donald Trump has said repeatedly this year that rates should come down. On Friday, the president got a concurring opinion from a top official inside the central bank. Fed Gov. Christopher Waller told CNBC that he believes tariffs won't have a big impact on inflation and that Powell should consider cutting rates next month. "I think we've got room to bring it down, and then we can kind of see what happens with inflation," Waller said, adding that rate cuts could be paused again if geopolitical tensions rise and push up inflation. He also said that any concerns about the labor market should be addressed sooner rather than later, and the right call would be to "move now, don't wait." Arguments over whether to cut interest rates and by how much have swirled in markets all year. Fed fund futures still imply an 83% chance of no cut in July, with the September meeting being eyed as the earliest date for a 25 basis point reduction. Recently, Trump has been more vocal about his wish for the Fed to lower borrowing costs. Vice President JD Vance has also piled on, criticizing the central bank and describing its refusal to cut interest rates as "monetary malpractice." Waller's dovish comments initially sparked a positive reaction in markets, though stocks pared most gains by late morning. S&P 500: 5,985.71, up 0.08% Dow Jones Industrial Average: 42,318.84, up 0.35% (+147.19 points) Nasdaq Composite: 19,491.52, down 0.28% Despite the blowback, Powell has been insistent on remaining in a holding pattern until the data shifts. "We believe that the current stance of monetary policy leaves us well positioned to respond in a timely way to potential economic developments," he said at the recent meeting, adding that he would have more to say after reviewing economic developments. Trump has said he wished to fire Powell, though the market balked at the prospect of political meddling and forced him to temper his comments. As for who could be the next Fed boss, betting markets see former Fed Gov. Kevin Warsh, former Trump economic advisor Judy Shelton, and current Treasury Secretary Scott Bessent as the top three most likely picks, though the highest odds show no pick before December 2025.
Yahoo
21 minutes ago
- Yahoo
Stocks Erase Early Gains on Weakness in Chip Makers
The S&P 500 Index ($SPX) (SPY) today is down -0.26%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.09%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.59%. September E-mini S&P futures (ESU25) are down -0.16%, and September E-mini Nasdaq futures (NQU25) are down -0.48%. Stock indexes today gave up an early advance and turned lower on weakness in chip makers after a report from The Wall Street Journal stated that a top US official told top global semiconductor makers the US might revoke waivers for allies with semiconductor plants in China. Stocks today initially moved higher on signs of easing tensions in the Middle East. WTI crude prices erased gains and moved lower after Reuters reported that the Iranian government said it is ready to discuss limitations on its uranium enrichment. Stocks have support on speculation that the US will give negotiations a chance before deciding to enter the Israel-Iran war, following the White House's announcement on Thursday that President Trump would decide within two weeks on any US involvement in the conflict, and there is still a "substantial chance" of a negotiated settlement. Stocks also have support from dovish comments today from Fed Governor Waller, who said, "I think we have room to bring interest rates down as early as July, and then we can see kind of see what happens with inflation." Trading activity today may be more volatile than usual due to the expiration of approximately $6.5 trillion in June options, futures, and derivatives contracts, an event known as "triple witching." Today's US economic news was negative for stocks. The June Philadelphia Fed business outlook survey was unchanged at -4.0, weaker than expectations of an increase to -1.5. Also, May index of leading economic indicators fell -0.1% m/m, right on expectations, and the sixth consecutive month the LEI has declined. Stocks still have some negative carryover from Wednesday when Fed Chair Powell warned that tariff-driven economic uncertainty and inflation risk continue to complicate the Fed's chances to ease monetary policy. Also, the FOMC cut its US GDP forecast and raised its inflation forecast for this year. Hostilities between Israel and Iran entered an eighth day today with no signs of easing. Israel struck more of Iran's nuclear and missile production sites today and warned it could bring down Iran's leadership. Meanwhile, Iran said it won't negotiate with the US while Israel's assault continues. Iranian President Pezeshkian said the only way to end the imposed war is to "unconditionally stop" the enemy's aggression. Iran showed no signs of backing down and reiterated an intention to respond with force if the US were to get directly involved in Israeli attacks. So far, there's been no closure of the vital Strait of Hormuz that handles about 20% of the world's daily crude shipments, although a French naval liaison group said that navigational signals from about 1000 vessels a day moving through the strait are being disrupted due to "extreme jamming" of signals from the Iranian port of Bandar Abbas, which caused a collision of two tankers Tuesday near the Strait of Hormuz. Investors are bracing for negative tariff news within the next week or so following President Trump's announcement last Wednesday that he intends to send letters to dozens of US trading partners within one to two weeks, setting unilateral tariffs ahead of the July 9 deadline that came with his 90-day pause. The markets are discounting the chances at 15% for a -25 bp rate cut at the July 29-30 FOMC meeting. Overseas stock markets today are mixed. The Euro Stoxx 50 is up by +0.70%. China's Shanghai Composite closed down -0.07%. Japan's Nikkei Stock 225 closed down -0.22%. Interest Rates September 10-year T-notes (ZNU25) today are down -4 ticks. The 10-year T-note yield is up +2.8 bp to 4.419%. T-notes today are under pressure on negative carryover from weakness in European government bonds. Also, rising inflation expectations are bearish for T-notes after the US 10-year breakeven inflation rate today rose to a 2-week high at 2.337%. T-notes recovered from their worst levels on the weaker-than-expected Philadelphia Fed business outlook survey. Also, dovish comments from Fed Governor Waller were bullish for T-notes when he said, "I think we have room to bring interest rates down as early as July." T-notes are still supported by safe-haven demand on concern the US may be on the verge of joining the attack against Iran. European government bond yields today are higher. The 10-year German bund yield is up +0.9 bp to 2.530%. The 10-year UK gilt yield is up +1.8 bp to 4.548%. The Eurozone Jun consumer confidence index unexpectedly fell -0.1 to -15.3, weaker than expectations of an increase to -14.9. The German May PPI fell -1.2% y/y, right on expectations and the biggest decline in 8 months. UK May retail sales ex-auto fuel fell -2.8% m/m, weaker than expectations of -0.7% m/m and the biggest decline in nearly 1-1/2 years. Swaps are discounting the chances at 6% for a -25 bp rate cut by the ECB at the July 24 policy meeting. US Stock Movers Chip makers turned lower today and are weighing on the broader market. Lam Research (LRCX), KLA Corp (KLAC), and Applied Materials (AMAT) are down more than -3%. Also, Broadcom (AVGO), ASML Holding NV (ASML), Marvell Technology (MRVL), and Intel (INTC) are down more than -2%. In addition, Qualcomm (QCOM), GlobalFoundries (GFS), Analog Devices (ADI), and NXP Semiconductors NV (NXPI) are down more than -1%. Weakness in the Magnificent Seven stocks is a negative factor for the overall market. Alphabet (GOOGL) is down more than -2%. Also, Nvidia (NVDA), (AMZN), Meta Platforms (META), and Tesla (TSLA) are down more than -1%. Microsoft (MSFT) is down -0.10%, but Apple (AAPL) is buckling the trend and is up +0.34%. Accenture (ACN) is down more than -5% to lead losers in the S&P 500 after lowering its full-year operating margin forecast to 15.6% from a previous forecast of 15.6%-15.7%. Smith & Wesson Brands (SWBI) is down more than -15% after reporting Q4 adjusted EPS of 20 cents, weaker than the consensus of 23 cents. Jack in the Box (JACK) is down more than -1% after Stifel downgraded the stock to hold from buy. Kroger (KR) is up more than +7% to lead gainers in the S&P 500 after reporting Q1 adjusted EPS of $1.49, better than the consensus of $1.45. CarMax (KMX) is up more than +5% after reporting Q1 net sales of $7.55 billion, stronger than expectations of $7.52 billion. Fair Isaac Co (FICO) is up more than +2% after its Board of Directors approved a stock repurchase program to acquire up to $1 billion of the company's outstanding common stock. GMS Inc (GMS) is up more than +29% after the Wall Street Journal reported that Home Depot had made an offer for the company, potentially setting off a bidding war with QXO Inc, which made a $5 billion offer for the company earlier this week. Circle Internet Group (CRCL) is up more than +12%, adding to Wednesday's +34% surge after the US Senate passed stablecoin legislation setting up regulatory rules for cryptocurrencies pegged to the dollar. Mondelez International (MDLZ) is up more than +3% to lead gainers in the Nasdaq 100 after Wells Fargo Securities upgraded the stock to overweight from neutral with a price target of $78. Darden Restaurants (DRI) is up more than 1% after reporting that Q4 comparable same-store sales rose 4.60%, stronger than the consensus of 3.46%. Earnings Reports (6/20/2025) Accenture PLC (ACN), CarMax Inc (KMX), Darden Restaurants Inc (DRI), Kroger Co/The (KR). On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
26 minutes ago
- Yahoo
Trump's housing director rips the Fed, says the slow pace of rate cuts is fueling America's home-inventory problem
The Fed kept interest rates unchanged again this week, sparking criticism from the Trump administration. The head of the FHFA argues that high rates have worsened the housing crisis. High rates have created a "lock-in" effect that's limited inventory of homes for sale, experts say. Federal Reserve Chairman Jerome Powell's decision to keep rates unchanged earlier this week on Wednesday was widely expected by the market, but it was bashed by the president and his administration. In addition to Donald Trump, the critics of the latest Fed decision include Bill Pulte, the director of the Federal Housing Finance Agency and chairman of Fannie Mae and Freddie Mac. Many naysayers argue inflation has come down enough for the Fed to cut rates, but Pulte takes another issue: he believes sustained high rates are kneecapping America's housing market and exacerbating the affordability crisis. On Wednesday, prior to the Fed meeting, Pulte posted on X that Powell needed to "lower interest rates today," or immediately resign, arguing that Fannie Mae and Freddie Mac could help more Americans afford a house if rates came down. After the decision to hold rates steady, Pulte shared a series of posts on X further bashing Powell, calling him "a main reason for the Housing Supply Crisis in this country" and criticizing him for hurting the mortgage market. As he's done in the past, President Donald Trump also ripped into the Fed's decision on Truth Social, referencing Pulte's statements and calling for Powell to lower rates to 2.5%. The president has repeatedly clashed with Powell, blaming him for holding the stock market back, and even threatening to fire him. Powell's reasoning behind staying in wait-and-see mode is that the Fed is monitoring the impacts of tariffs on inflation and wants to see more evidence that inflation has cooled for good. Pulte's argument is referring to the "lock-in" effect in the housing market, which some housing experts argue has exacerbated supply issues by keeping current owners from selling their homes to avoid having to refinance a new purchase as a higher rate than their existing mortgage. The 30-year mortgage rate rose from historically low levels under 3% during the pandemic to around 7% today. Some housing experts may agree with Pulte's assessment that high rates are hurting the market. Lawrence Yun, chief economist at the National Association of Realtors, sees mortgage rates as the "magic bullet" that'll alleviate the housing crisis. "Part of the delay in recovery is because the Federal Reserve has changed its outlook and appears to be on pause for a longer period," Yun said during a NAR economic forum earlier this month. Others are optimistic that the housing market will improve this year. The Fed is still on track for two cuts in 2025, and Nadia Evangelou, senior economist at NAR, sees a path for mortgage rates to decline to 6.4% to 6.5% by year-end. In some markets across the country, buyers are gaining the upper hand as home price appreciation slows and increases affordability. "We are at a bit of a turning point with mortgage rates," Evangelou told Business Insider. "We expect affordability to be better and for rates to ease, but we don't know to what extent. When mortgage rates are at 6.7% or lower, we typically see more activity." Read the original article on Business Insider Sign in to access your portfolio
