Calls for Fed rate cuts are increasing.

Critical Interest Rate Cut Statements from Fed Governors

Federal Reserve (Fed) governor Christopher Waller stated that they may lower interest rates in quarter-point increments to support the weakening labor market. In a statement to Bloomberg Television, Waller said, "You don't want to make a mistake; being cautious and careful, making a 25 basis point cut and watching developments is the right approach."

Trade Tensions and Economic Risks

Another Fed governor, Stephen Miran, emphasized that the resumption of U.S.-China trade tensions poses additional downward risks to the economy, advocating for a rapid easing of monetary policy. Miran stated, "If monetary policy remains this restrictive, the negative outcomes would increase when the economy faces an unexpected shock."

Views on Interest Rate Cuts

Miran reiterated that he expects a half-point interest rate cut at the Fed meeting in October. However, he also noted that there is a high probability officials will lower rates by a quarter point as they did in September. Miran added, "I think there will likely be three 25 basis point interest rate cuts this year."

What to Expect in the Next Meeting?

Waller expressed that he believes the policy interest rate should be cut by another 25 basis points at the meeting to be held on October 29. Waller indicated that they will monitor how solid GDP data interacts with the weakening labor market.