Waller opposes rate hikes, sees inflation cooling in H2
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- Christopher Waller said he doesn't support rate hikes, arguing inflation is likely to cool in the second half of the year as the effects of tariffs fade.
- Waller observed that inflation was high but didn't worsen last year after the White House enacted tariffs, suggesting underlying inflation improved even as tariffs pushed prices higher.
- Waller voted to hold interest rates steady at this week's Fed meeting after initially planning to push for a cut following the weak February jobs report, citing concerns about oil prices and a possible protracted Middle East conflict.
- Waller said he would return to advocating for rate cuts later this year if the economy can weather the war's impact, adding that 'it doesn't mean that I'm going to stay put for the rest of the year.'
- Michelle Bowman, the Fed's vice chair for supervision, said in a separate Fox Business interview she has penciled in three rate cuts this year.
Why it matters: Waller's stance shows internal Fed division: Bowman has penciled in three 2026 cuts, while Waller is holding rates until he sees whether oil-driven inflation from the Middle East conflict fades. His tariff insight is key — since inflation didn't worsen despite tariffs, underlying price pressures actually eased, supporting the case for cuts once geopolitical risk passes.
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