Governor Christopher Waller of the Federal Reserve has reiterated his support for a rate cut at the December meeting, pointing to signs of weakening labour‐market conditions and inflation that he believes is no longer the dominant policy threat. Speaking in London on November 17, 2025, Waller said that corporate executives he had recently spoken to were increasingly mentioning layoffs and hiring freezes, and that the broader job market appears to be “near stall speed.”
Waller’s remarks mark a clear shift toward easing monetary policy within an institution that just months ago signalled it would maintain higher rates for longer. While inflation remains above the 2 % target, Waller noted that excluding temporary tariff effects, inflation is “perhaps less than half a percentage point above” target and thus manageable under current conditions. Combined with signs of labour‐market softness, he argued that a December cut would “provide additional insurance” against further economic weakening.
The governor emphasized that while data have been delayed because of the recent government shutdown, the Fed is not “in a fog.” He praised private‐sector indicators such as unemployment claims and business surveys as providing actionable insight despite the official data gaps. He said his concern centres on how high‐interest-rate policy is affecting lower- and middle‐income households, and added that further delay in easing could risk leaving policy out of step with the economy.
Waller’s public stance underscores the internal divisions emerging within the Federal Open Market Committee (FOMC). Some counterparts including regional bank presidents continue to argue that inflation remains too elevated for immediate rate cuts, while others like Vice Chair Philip Jefferson urge a more cautious approach. Waller warned that razor‐thin voting margins on the FOMC could undermine market confidence and emphasised the risks of policy ambiguity.
His view arrives at a moment when markets are already pricing in a high probability of a December cut. Futures markets and Fed-watch tools show traders increasingly confident that the central bank will act at its December 9–10 meeting. Waller’s comments may serve to nudge those odds higher and help shape market expectations for early-2026 policy decisions.
The potential cut would have broad ramifications across financial markets. Lower interest rates generally ease borrowing costs, stimulate credit and support risk-assets such as equities. For the U.S. economy, Waller suggested that easing now would help protect investment, hiring and consumer spending from further erosion. On the flip side, a cut could signal the Fed believes the economy is already at risk of deceleration a message that might temper optimism in some quarters.
While a majority of Fed officials have not yet declared their view publicly, Waller’s remarks reflect a growing sense among some policymakers that monetary policy may need to pivot sooner than previously communicated. His focus on the labour‐market weakness and his confidence in a December move send a strong signal to markets that the easing cycle may be closer than many anticipated.
FAQs
Q1: Who is Christopher Waller and what did he say?
Christopher Waller is a Governor of the Federal Reserve who publicly advocated for a rate cut at the December FOMC meeting, citing a weakening labour market and manageable inflation.
Q2: Why does he favour a rate cut in December?
He believes the labour market is “near stall speed,” inflation is close to target excluding tariffs, and that restrictive policy is starting to weigh on lower- and middle-income households.
Q3: Does this mean the Fed will definitely cut rates in December?
Not necessarily. While Waller supports a cut, other FOMC members remain cautious, and the decision depends on incoming data.
Q4: How are markets reacting to Waller’s comments?
Markets have viewed the remarks as dovish, reinforcing expectations for a December cut and contributing to lower bond yields and a softer U.S. dollar.
Q5: What are the risks if the Fed cuts rates now?
The main risk is that inflation could reaccelerate if policy is eased too soon or too much. Some Fed officials remain wary of that possibility.
Q6: What might happen next after a December cut?
If the Fed cuts in December, it may mark the beginning of an easing cycle, with markets closely watching employment, inflation and global growth data for further policy signals.