Federal Reserve governor Christopher Waller said Monday that solid job gains in January could mean the central bank can skip a rate cut at its next meeting in March, a decision that would likely spur further attacks by President Donald Trump.<\/p>\n
At the same time, Waller said last month\u2019s pickup in hiring, when employers added a more-than-expected 130,000 jobs, could have been a one-time gain. He said he would need to see a similarly positive report next month to conclude the job market, which he noted was very weak in 2025, is improving.<\/p>\n
Waller\u2019s hedging is a notable shift from January, when he was one of the two Fed governors to dissent against the central bank\u2019s decision to hold its key rate steady after three rate cuts at the end of last year. The decision left the Fed\u2019s short-term rate at about 3.6%.<\/p>\n
When the Fed reduces its rate, over time it can lead to cheaper borrowing for mortgages, auto loans, and business loans, though those rates are also influenced by financial markets.<\/p>\n
Waller also said that the Supreme Court\u2019s decision to strike down many of Trump\u2019s tariffs would likely have only a limited impact on the economy and inflation, and therefore wouldn\u2019t affect his view on rates.<\/p>\n
The ruling could have \u201ca positive impact on spending and investment,\u201d he said, but \u201chow large the impact may be and how long it could last is unclear.\u201d<\/p>\n
Waller also noted that the White House is seeking to reimpose the tariffs using other laws, creating \u201cconsiderable uncertainty over to what extent tariffs will continue.\u201d<\/p>\n
If February\u2019s jobs report is similar to last month\u2019s, \u201cindicating that downside risks to the labor market have diminished, it may be appropriate\u201d to keep the Fed\u2019s short-term rate \u201cat current levels and watch for continued progress on inflation and strength in the labor market,\u201d Waller said in remarks to a conference held by the National Association for Business Economists.<\/p>\n
\u201cBut if the good labor market news of January is revised away or evaporates in February,\u201d he continued, \u201ca cut should be made at the March meeting.\u201d<\/p>\n
\u201cAs things stand today, I rate these two possible outcomes as close to a coin flip,\u201d Waller added.<\/p>\n
The Fed governor also addressed a conundrum many economists have identified about the current economy: Growth is relatively solid, yet employers added few, if any, jobs last year. Waller said he thinks even the meager gains reported earlier this month for last year will be eventually revised to below zero.<\/p>\n
\u201cThis would be the first time in my career, my life, that I saw an economy growing like this, and zero job growth,\u201d Waller said. \u201cI don\u2019t even know quite how to think about this.\u201d He added that hiring could pick up this year and largely resolve the contradiction.<\/p>\n
Another explanation could be higher productivity, stemming from the pandemic, as companies learned to produce more with fewer workers.<\/p>\n
Trump attacked the Fed on Friday after the government reported that the economy grew more slowly in the final three months of last year than in the summer and fall. Growth slowed to an annual rate of 1.4%, down from 4.4% in the fall.<\/p>\n
\u201cLOWER INTEREST RATES,\u201d Trump posted. \u201c\u2019Two Late\u2019 Powell is the WORST!!\u201d he added, misspelling his usual nickname for Chair Jerome Powell, who he has referred to previously as \u201cToo Late.\u201d<\/p>\n
Source: RhinoEasy News<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" Federal Reserve governor Christopher Waller said Monday that solid job gains in January could mean the central bank can skip<\/p>\n","protected":false},"author":1,"featured_media":1823,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"colormag_page_container_layout":"default_layout","colormag_page_sidebar_layout":"default_layout","footnotes":""},"categories":[9],"tags":[],"class_list":["post-1824","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"_links":{"self":[{"href":"https:\/\/rhinoeasy.com\/index.php?rest_route=\/wp\/v2\/posts\/1824","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/rhinoeasy.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/rhinoeasy.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/rhinoeasy.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/rhinoeasy.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1824"}],"version-history":[{"count":0,"href":"https:\/\/rhinoeasy.com\/index.php?rest_route=\/wp\/v2\/posts\/1824\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/rhinoeasy.com\/index.php?rest_route=\/wp\/v2\/media\/1823"}],"wp:attachment":[{"href":"https:\/\/rhinoeasy.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1824"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/rhinoeasy.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1824"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/rhinoeasy.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1824"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}