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Federal Reserve Governor Christopher Waller recently expressed his support for an interest rate cut at the upcoming central bank policy meeting. In a speech at the Council on Foreign Relations in New York, Waller emphasized the need to lower the target range for the federal funds rate, citing progress on inflation and moderation in the labor market as key factors.
This signals a clear shift in the central bank’s stance towards a more accommodative monetary policy, which has reignited investor appetite for risk. Waller’s comments echo sentiments shared by other policymakers, indicating a high probability of a rate cut at the Sept. 17-18 Federal Open Market Committee meeting.
While Waller did not specify the exact magnitude or frequency of rate cuts, he emphasized his willingness to support more aggressive measures if the data suggests a larger reduction is necessary. With job growth showing signs of weakness and inflation moderating, the Fed is poised to act decisively to support economic growth and maintain price stability.
Market participants have already started pricing in the possibility of multiple rate cuts in the coming months, with expectations of a quarter percentage point reduction this month and more aggressive moves later in the year. The CME Group’s FedWatch measure reflects this sentiment, forecasting a potential half-point cut in November and potentially another in December.
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