Overview

• Waller said he supports cutting interest rates later this year if inflation trends toward the Fed’s 2 percent target alongside steady employment.
• He argued that one-time price increases from Trump’s import tariffs should be ignored in near-term rate decisions because they are unlikely to persist.
• He warned that how trade policy unfolds could pose downside risks to economic growth and jobs while driving up inflation pressures in the second half of 2025.
• The Fed’s benchmark rate has remained unchanged at 4.25–4.5 percent for three consecutive meetings as officials assess the economic effects of tariffs.
• He described a ‘smaller-tariff’ scenario with 10 percent import duties and a ‘large-tariff’ scenario at 25 percent, but noted that the risk of the higher-tariff path has receded.