Federal Reserve Governor Waller calls for "greater caution" regarding future interest rate cuts

ChainCatcher news, Federal Reserve Governor Waller stated that recent economic data suggests that policymakers can approach the issue of subsequent interest rate cuts with less urgency than during last month's meeting. Waller said in a prepared speech at a meeting held at the Hoover Institution in Stanford, California on Monday, "I think the overall data suggests that monetary policy should be more cautious in the pace of rate cuts than it was during the September meeting." He added that if the current economic conditions persist, "we can gradually shift policy to a neutral stance." The neutral policy interest rate refers to a rate that neither stimulates nor suppresses economic growth. Waller also noted that recent data—including upward revisions to economic growth and an increase in job vacancies—indicates that the extent of the economic slowdown may not be as severe as expected. At the same time, Waller stated that his baseline expectation is to gradually lower interest rates next year.

The Federal Reserve will make its next interest rate decision at the conclusion of the FOMC meeting on November 6-7. During the Q&A session following his speech, Waller declined to provide details on the "gradual" pace of rate cuts.