Fed's Waller sees rate cuts in second half of 2025

The US central bank could ease monetary conditions in the second half of 2025 if the Trump administration's tariffs on key trading partners stabilize at around 10%. This point of view was shared by Federal Reserve Governor Christopher Waller.

Fed officials have been holding interest rates steady this year, citing the overall resilience of the American economy and Donald Trump’s ambiguous policies, Bloomberg reports.

Waller characterizes recent US price growth as transitory, yet he warns that escalating tariffs may substantially boost inflation and challenge the central bank's efforts.

Meanwhile, the tax bill signed by Trump narrowly passed the House of Representatives. The legislation extends the tax cuts from the President’s first-term, raises the US debt ceiling, and expands the budget deficit, Bloomberg notes.

The situation has sparked a sell-off in longer-dated US Treasuries and heightened concerns about the nation's fiscal policy, the agency's sources indicate.