{"id":22973,"date":"2025-11-17T23:00:41","date_gmt":"2025-11-17T23:00:41","guid":{"rendered":"https:\/\/finderica.com\/?p=22973"},"modified":"2025-11-17T23:00:41","modified_gmt":"2025-11-17T23:00:41","slug":"waller-backs-25-bps-risk-management-rate-cut-in-december","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=22973","title":{"rendered":"Waller backs 25 bps &#8216;risk management&#8217; rate cut in December"},"content":{"rendered":"<div>\n<div class=\"Enhancement\" data-align-center=\"\">\n<div class=\"Enhancement-item\">\n<figure class=\"Figure\">   <\/figure>\n<\/div><\/div>\n<ul class=\"rte2-style-ul\">\n<li><b>Key Insight: <\/b>Fed Gov. Christopher Waller said quantitative and qualitative market indicators continue to point to a distressed labor market, justifying a near-term interest rate cut as a means to boost labor and consumer demand.\u00a0<\/li>\n<li><b>Expert Quote: &#8220;<\/b>This reading of the data leads me, at this moment, to support a cut in the [Fed&#8217;s] policy rate at our next meeting on Dec. 9 and 10 as a matter of risk management.&#8221; \u2014 Fed Gov. Christopher Waller.<\/li>\n<li><b>What&#8217;s at stake: <\/b>Opinions among FOMC members on the appropriate path for monetary policy are highly divided, creating uncertainty on whether the Fed&#8217;s rate-setting committee will move to cut rates in December.<\/li>\n<\/ul>\n<p>Federal Reserve Gov. Christopher Waller said he intends to support a 25-basis-point cut to short-term interest rates at the Federal Open Market Committee&#8217;s December meeting.<\/p>\n<p>Speaking at an annual dinner hosted by the Society of Professional Economists in London, Waller said the labor market continues to show signs of distress, requiring the Fed&#8217;s rate-setting committee to move monetary policy toward a more neutral stance.<\/p>\n<p>Waller said that <ps-link><u>despite a lack of official labor market data<\/u><\/ps-link>, forecasts from both the public and private sectors show that economic activity is slowing and consumer sentiment is weakening.<\/p>\n<p><b>&#8220;<\/b>This reading of the data leads me, at this moment, to support a cut in the FOMC&#8217;s policy rate at our next meeting on Dec. 9 and 10 as a matter of risk management,&#8221; said Waller.<\/p>\n<p>The Fed governor pointed to payroll figures from ADP, which show only 6,500 net jobs were created in September and October. That figure stands in contrast to the <ps-link><u>22,000 jobs added<\/u><\/ps-link> to the economy in August, according to the Bureau of Labor Statistics.\u00a0<\/p>\n<p>&#8220;The latest weekly data are even weaker,&#8221; Waller stressed.<\/p>\n<p>He also cited a decline in job postings on job search site Indeed in October, and noted that a recent survey of large employers found they expect 2026 to be the &#8220;worst job market for new college graduates since the pandemic year of 2021, when the unemployment rate was around 6% at graduation time.&#8221;<\/p>\n<p>Waller added that in the past four weeks, his conversations with CEOs have suggested companies are starting to plan for future layoffs.<\/p>\n<p>&#8220;It could be AI related. It could be a lot of other things,&#8221; he said. &#8220;I&#8217;ve heard a lot more of this in the last four weeks and that&#8217;s what got me more concerned. We should be paying more attention to the labor market.&#8221;<\/p>\n<p>Waller said arguments from some of his FOMC counterparts that the <ps-link><u>economy is performing well<\/u><\/ps-link> are short-sighted, because conditions are currently difficult for lower- and middle-income households.<\/p>\n<p>&#8220;That&#8217;s kind of where some of the disagreement comes in on the committee,&#8221; he said. &#8220;People point to the financial markets and say, &#8216;How can you say we&#8217;re restrictive? Look at this stock market. Look at these bond markets,'&#8221; he said. &#8220;OK, it&#8217;s loose for corporate America.&#8221;<\/p>\n<p>He specifically pointed to the <ps-link><u>financial squeeze of housing<\/u><\/ps-link> and cars on consumers, calling it &#8220;an ongoing challenge for consumers, especially lower- and middle-income consumers.&#8221;<\/p>\n<p>&#8220;When I go talk to households \u2026 they can&#8217;t get a house, they can&#8217;t afford to buy a car anymore,&#8221; Waller said. &#8220;This doesn&#8217;t tell me financial conditions are loose for the American household.&#8221;<\/p>\n<p>Regarding inflation, Waller said he is not concerned, noting that tariffs will have a one-time impact and one that is not significant.<\/p>\n<p>&#8220;Inflation through September continued to show relatively small effects from tariffs and support the hypothesis that tariffs are having a one-off effect raising price levels in the U.S. and are not a persistent source of inflation,&#8221; he said.<\/p>\n<p>Waller added that if anyone is worried about &#8220;groupthink&#8221; among Fed officials, the upcoming FOMC meeting <ps-link><u>will demonstrate how divided the committee is<\/u><\/ps-link>.<\/p>\n<p>&#8220;Now on the groupthink thing, people who are accusing us of this: Get ready, you might see the least groupthink you&#8217;ve seen from the FOMC in a long time,&#8221; he said. &#8220;That&#8217;s apparently a good thing.&#8221;<\/p>\n<\/div>\n<p><a href=\"https:\/\/www.americanbanker.com\/news\/waller-backs-25-bps-risk-management-rate-cut-in-december\" target=\"_blank\" rel=\"noopener\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Insight: Fed Gov. Christopher Waller said quantitative and qualitative market indicators continue to point to a distressed labor market, justifying a near-term interest rate cut as a means to boost labor and consumer demand.\u00a0 Expert Quote: &#8220;This reading of the data leads me, at this moment, to support a cut in the [Fed&#8217;s] policy<\/p>\n","protected":false},"author":1,"featured_media":22974,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[218],"tags":[1562,8617,419,2299,1126,138,181,958],"class_list":{"0":"post-22973","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-banking","8":"tag-backs","9":"tag-bps","10":"tag-cut","11":"tag-december","12":"tag-management","13":"tag-rate","14":"tag-risk","15":"tag-waller"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/22973","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=22973"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/22973\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/22974"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=22973"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=22973"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=22973"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}