A Federal Reserve member, Christopher Waller, suggested that it’s possible for President Trump to take over as chair of the central bank. He believes the Fed should start cutting interest rates at its next meeting.
In an interview on CNBC’s “Squawk Box,” Waller expressed concerns about how quickly a weakening job market might decline if the Fed doesn’t lower rates at its September policy meeting.
He noted that while inflation appears to be rising, he doesn’t feel more alarmed about tariff-driven inflation compared to others.
“When the labor market declines, it can happen rapidly. In my view, we should initiate rate reductions at the upcoming meeting,” Waller remarked.
“We don’t need to rush into multiple steps. There are lingering worries about inflation, but I’m not particularly bothered by it,” he added.
Waller, who was appointed by Trump during his first term, is among about 12 candidates being considered to replace Jerome Powell as Fed Chairman. Trump has had ongoing frustrations with Powell and is keen to find someone whose economic views align more closely with his own.
Waller has gained some favor with Trump and his close advisors by downplaying concerns over the inflationary effects of tariffs. While Powell and other economists still view the situation with caution, Waller has maintained for some time that Trump’s tariffs would only lead to a temporary spike in prices.
“We might see several cuts in the next three to six months, depending on the data,” Waller mentioned.
He also drew attention in July when, alongside director Michelle Bowman, he was part of a historic vote where both Fed board members dissented from the majority for the first time in over 30 years.
Waller’s perspectives on interest rates and tariffs could be more appealing to Trump than Powell’s approach. However, distancing himself from the Fed’s current chair might risk his standing with the president.
Waller acknowledged on Wednesday that tariffs could hinder economic growth—a reality that Trump and many of his advisors have often disputed.
The Federal Open Market Committee (FOMC), responsible for setting interest rates, will meet on September 16-17.
In an earlier statement, Powell hinted at the possibility of cutting rates in September, following a trend of economic data pointing to a weaker job market. According to the CME Group FedWatch tool, there’s now a 95% chance the Fed will raise rates by 0.25 percentage points.
While a small rate cut seems nearly guaranteed, uncertainty looms over the next FOMC meeting.
Last week, Trump made waves in the financial community by moving to dismiss Lisa Cook, a committee member who has legally challenged his actions. Cook is trying to show that the allegations of mortgage fraud against her by Trump’s allies aren’t sufficient grounds for dismissal under the Federal Reserve Act.
Trump is also working to confirm Stephen Milan, the economist from the White House, ahead of the forthcoming FOMC meeting. Milan will face a Senate Banking Committee confirmation hearing on Thursday and is expected to receive swift approval from the Republican-controlled chamber.
