Fed’s Waller says rate cuts remain possible later in 2025

Speech by Governor Waller on the economic outlook, full text here:

• The Effects of Tariffs on the Three I’s: Inflation, Inflation Persistence, and Inflation Expectations

• ‘Good news’ rate cuts remain possible later this year
• Rate cut view rests on easing inflation, tariffs on lower end of range
• Strong economy through April gives Fed time to see how trade shakes out
• Tariffs likely to create one-time price increase Fed can look through
• Considerable uncertainty still surrounds trade policy outlook
• Sees downside risk to economy, job market, upside risk to inflation
• Tariffs to be main driver of inflation this year
• Tariffs will drive up unemployment which will likely linger
• Tariff inflation impact likely greatest in second half of 2025
• 01 Jun 2025 08:00:00 PM – Fed’s Waller says he is most attentive to market and forecaster views on inflation
• Doesn’t see real world issues with expected path of inflation
• Some of modest sized tariff regime will not be passed along

This article was written by Eamonn Sheridan at www.forexlive.com.