Federal Reserve Weighs Interest Rate Cuts Amid Labor Market Concerns

Federal Reserve Governor Christopher Waller has intensified his call for reducing short-term U.S. borrowing costs. He expressed support for an interest-rate cut at the upcoming Federal Open Market Committee meeting to mitigate a potential labor market collapse.

Waller emphasized his readiness to endorse a 25 basis point cut if the current economic scenario does not improve. He expressed particular concern about the labor market weakening more drastically and cautioned against delaying action until deterioration becomes unavoidable, which might compromise effective monetary policy adjustments.

The Fed has maintained steadiness in the policy rate following past reductions, reflecting its cautious stance amidst tariffs and inflation concerns. Waller's analysis, however, indicates the pressing need for rate cuts, aligning with staff findings that support his stance.

(With inputs from agencies.)