Christopher Waller, a member of the Federal Reserve's Board of Governors, has joined President Donald Trump in calling for interest rate cuts as early as July. In an interview with CNBC, Waller emphasized the need to lower borrowing costs, aligning with President Trump's persistent demands for reduced rates. Waller suggested that the impact of Trump's tariffs on imported goods would likely be minimal, resulting in only a temporary increase in inflation. He stated, "We're in a good spot right now for talking about bringing the rate down," but advised starting with gradual cuts instead of the large reductions Trump has advocated.

President Trump has criticized the Fed and its chair, Jerome Powell, for not reducing rates quickly enough, arguing that high rates are burdening the federal government with massive interest payments. However, the Fed, which is tasked with maximizing employment and stabilizing prices, does not consider government finances when setting rates. Powell has maintained that the central bank's decisions are based on economic data, and recent Fed speeches have confirmed this approach.

Waller pointed out signs of strain in the job market, such as increased youth unemployment, as further justification for immediate rate cuts, especially since inflation remains low. As Trump considers candidates for Powell's successor, Waller is among the potential contenders, along with former Fed governor Kevin Warsh and Treasury Secretary Scott Bessent. Trump plans to announce his choice for Fed chair well before Powell's term ends in May 2026, a move that would create a "shadow" Fed chair, an unprecedented step in the Fed's history.

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