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2025-12-17 22:05:23
[Federal Reserve Governor Waller: Interest Rates Remain Above Neutral Level, Inflation to Fall in 2026] ⑴ Federal Reserve Governor Waller stated that the current federal funds rate is still 50 to 100 basis points above the neutral rate, meaning policy remains tight and there is room for rate cuts. ⑵ Waller believes the job market is "very weak," and current non-farm payroll growth is "not ideal," but there has been no precipitous drop, supporting the Fed's continued rate cuts. ⑶ He advocates for a "moderate pace" of rate cuts, without taking aggressive action, and expects inflation to fall from current levels in the coming months without "re-accelerating." ⑷ Waller is confident that inflation expectations are anchored and believes inflation will fall in 2026. ⑸ Following his speech, US Treasury prices rebounded somewhat, but the yield curve remained largely flat, indicating that the market is still weighing short-term easing against the long-term economic outlook.
