Fed’s Christopher Waller predicts new rate cuts this year

Federal Reserve (Fed) Governor Christopher Waller considers more interest rate cuts likely to happen later this year. This forecast is based on expectations of rising unemployment and temporary inflation increase in the country.

Speaking at a conference hosted by the Bank of Korea, Waller noted the rise in yields on long-term US Treasury bonds, which is driven by traders' concerns about the nation's budget deficit. An additional risk factor for foreign investors is the geopolitical tension combined with the American administration's tariff policy.

Christopher Waller also commented on the current inflation level, stating that the recent changes in consumer inflation expectations by the University of Michigan survey are inconclusive. The risks of an economic slowdown and sharp price increases in the country during the second half of the year remain relevant. However, as he emphasized, their realization depends on future US import policy.

Additionally, according to the official, labor market stabilization and recent progress in reaching the Fed's 2% inflation target provide enough time to forecast the outcomes of trade negotiations.