Fed’s Waller says rate cut could come as soon as July

Christopher Waller, a Federal Reserve Governor, has expressed support for a potential interest rate cut in July, noting that inflation is easing and the Fed should act proactively before any downturn in the labor market.

Despite Waller’s optimism, CME FedWatch shows that traders generally foresee rate cuts occurring later, likely in September, rather than in July, reflecting caution among market participants.

The Federal Reserve recently maintained its benchmark rate at 4.25%-4.5%, in line with trader expectations, while adjusting its GDP growth estimate for 2025 down to 1.4% and raising the inflation forecast to 3%.