Waller Says Fed Could Cut Rates this Year but Not Rapidly

With economic activity and labor markets in good shape and inflation coming down gradually to 2 percent, there is no reason for the Fed to move as quickly or cut as rapidly as in the past, Governor Christopher J. Waller said in prepared remarks for his appearance at The Brookings Institution. The Governor added that the healthy state of the economy provides the flexibility to lower the (nominal) policy rate to keep the real policy rate at an appropriate level of tightness. The data received in the last few months is allowing the Fed to consider cutting the policy rate in 2024 but concerns about the sustainability of such data trends require changes in the path of policy to be carefully calibrated and not rushed.


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