Bloomberg News
Federal Reserve Gov. Christopher Waller said he is in favor of a 25 basis point cut in September, and urged the Federal Open Market Committee members to “get on with it.”
In a speech delivered at the Economic Club of Miami Thursday, Waller said that signs of a weakening labor market continue to spread and remarked that the committee should have made a 25 point cut in its July meeting.
“I believe the data on economic activity, the labor market, and inflation support moving policy toward a neutral setting,” Waller said. “Based on the median of FOMC participants’ estimates of the longer-run value of the federal funds rate, neutral is 125 to 150 basis points lower than the current setting.”
Waller and Fed Vice Chair for Supervision Michelle Bowman voted against keeping rates steady in July, citing a preference to lower the federal funds rate by a quarter percentage point. The FOMC has
Waller in his speech said he is “still hopeful” that easing monetary policy now will keep the labor market from “deteriorating” while inflation falls back to the Fed’s 2% target. But Waller added that he was concerned that the labor market may be in a much tougher spot than originally thought, pointing to weak job creation numbers the past several months.”I always say that one month is not a trend, but now we have three months of weak job-creation data,” Waller said. “After revisions included in the July report, private-sector job creation averaged 52,000 in May, June, and July — about half the rate in the first quarter of 2025. The headline numbers, including public-sector workers, are, as I noted earlier, even worse.”
Waller said softening conditions in labor demand can be explained by continued uncertainty over tariff policy, which has iced out employee hiring. He also pointed to
Speaking on the job market, Waller also addressed the quality of monthly payroll data published by the Bureau of Labor Statistics and said there is “room for improvement.”
“Considering how important this data is in getting an accurate and reliable read on the state of the labor market, it is entirely appropriate to examine the quality of the jobs numbers and the process by which they are collected,” Waller said. He said the quality of the employment data continues to be sound in terms of the response rate, but pointed to slower response times by businesses as the reason why jobs report numbers are sometimes revised.
“Overall, the delay in responses does mean that we can expect initial reports to be noisier and more prone to revision,” Waller noted. “One month of data has never constituted a trend, but it is going to be especially important to take near-month payroll data with a grain of salt and form a picture of the labor market based on several months of results and a range of other labor market indicators.”
The Bureau of Labor Statistics has been in the spotlight after President Donald
“We need accurate jobs numbers. I have directed my Team to fire this Biden Political Appointee, IMMEDIATELY,” Trump posted on social media in early August. “She will be replaced with someone much more competent and qualified. Important numbers like this must be fair and accurate, they can’t be manipulated for political purposes.”