Fed Can Consider Interest Rate Cut This Month, Fed Governor Waller Says

Fed Governor Christopher Waller has stated that the FOMC members could consider a Fed rate cut this July despite Jerome Powell’s insistence on a wait-and-see approach. His statement comes just a day after the release of the June FOMC minutes and amid calls from Donald Trump for a ‘rapid’ interest rate cut.

Waller Raises Possibility of A July Fed Rate Cut

During a Federal Reserve Bank of Dallas event, Waller remarked that the Fed is too tight and that they can consider an interest rate this month. He also stated that the current policy rate is still restrictive.

His statement follows the release of the July FOMC minutes, which show that committee members remain wary of how the Trump tariffs could lead to higher inflation. However, Waller reiterated that the US Central Bank should look through the tariff price impact and possibly move for a Fed rate cut.

This isn’t the first time that the Fed Governor has called for a July cut. Last month, just days after the June FOMC meeting, he stated that a rate cut could happen as soon as this month. Waller opined that they are in a good position to cut rates since inflation is no longer a threat.

His statement echoes that of President Trump, who persistently called on Fed Chair Jerome Powell to cut rates. As CoinGape reported, Trump recently pushed for a 300 bps Fed rate cut. He urged the Fed to lower rates rapidly, as there is no inflation.

He also alluded to how the Bitcoin price and stock market are hitting new all-time highs (ATHs) to highlight the strength of the market. The president further remarked that the Fed should lower rates to reflect this strength.

Despite calls for a Fed rate cut, Powell continues to insist that the US economy is in a good position, allowing them to wait and see the impact of tariffs on inflation. Trump has gone so far as to call for Powell’s resignation due to his unwillingness to cut rates.

Interestingly, Waller has emerged as one of the potential candidates to replace Powell, although Polymarket data shows there is a 6% chance of that happening.

A Cut In July is Very Unlikely

Amid Waller’s recent statement, traders are betting against a Fed rate cut happening this month. Polymarket data shows that there is a 95% chance that the Fed keeps interest rates unchanged at the July 30 FOMC meeting.

CME FedWatch data also confirms this current sentiment among market participants. According to data from the platform, there is a 93.3% chance that interest rates will remain unchanged at the July meeting.

As CoinGape reported, the odds for a July Fed rate cut crashed following the release of the June US job data earlier this month. The employment figures showed that the US labor market is solid and that there is no reason for the Fed to hurry and cut interest rates.