Investing.com — Federal Reserve Governor Christopher Waller said in an interview with CNBC on Thursday that December’s inflation data was very good and if the data continues in the same direction, we could see a rate cut in the first half.
“If the inflation data is as it is, I would expect a reduction in the first half of the year,” he said.
Waller added that he doesn’t think a cut in inflation can be ruled out in March and that if inflation moves lower, there could be further cuts than the market currently sees, noting that three or four cuts could be possible this year “if the data is aligned.”
While cautioning that he may be more optimistic than his colleagues at the Fed, Waller said inflation is back on trend and he believes it will move closer to its target.
Assessing the recent jobs report, Waller said the strong data was a result of weaker earlier readings and that, by all accounts, the labor market is solid but not growing.
However, while Waller warned that future data could upset the outlook, he added that President-elect Trump’s potential tariffs may not lead to higher inflation.
Furthermore, Waller doesn’t see tariffs having much of an impact on inflation.
