Fed's Waller Eyes Additional Rate Reductions by 2025

Christopher Waller, a member of the Federal Reserve Board of Governors, has expressed his support for further interest rate cuts by the United States central bank in 2025. Speaking at an event organized by the Organization for Economic Cooperation and Development in Paris, Waller emphasized his confidence that inflation will decrease to the target rate of 2%.

Challenges and Risks Ahead

Despite acknowledging that progress seemed to stall in the final months of 2024 due to rising housing and nonmarket service costs, Waller remains optimistic about the downward trend in prices. However, he also pointed out potential inflationary risks stemming from geopolitical crises and the possible imposition of tariffs by US President-elect Donald Trump on certain foreign goods.

Monitoring and Preparedness

"We must closely monitor economic and financial conditions and look in every direction, and down the road, for emerging risks. In keeping to our mandates, we concede that seeing all these risks clearly is hard, so we need to remain focused," Waller concluded, highlighting the importance of vigilance and adaptability in monetary policy.