Overview

• Waller said he would support a 25 basis point reduction on September 16–17 and expects more cuts over the next three to six months to prevent a sharper labor-market slump.
• He said a larger move is not needed at present, though a markedly weak August jobs report with contained inflation could change his view.
• Futures markets put the probability of a quarter-point September cut near 85%–89% and project just over two cuts by December, while the S&P 500 has climbed to record highs on easing hopes.
• Recent data showed July payrolls rising by 73,000 with over 250,000 jobs erased from prior months and unemployment at 4.2%, sharpening attention on upcoming PCE, jobs and CPI reports.
• Political pressure has intensified after President Trump said he would remove Fed Governor Lisa Cook and she filed suit to block it, renewing questions about the central bank’s independence.