Source: Sharecast
In an interview with CNBC on Friday, policymaker Christopher Waller said the Fed should "look through" one-off inflationary pressures from trade tariffs and focus on the fact that underlying inflation has slowed.
His comments follow a Federal Open Market Committee meeting on Wednesday, at which the Fed voted to keep the Fed kept its target range for the Fed funds rate at 4.25-4.50%.
Following the meeting, Fed chair Jerome Powell indicated that the central bank would wait on more information regarding the impact of tariffs on prices before making any major moves, but acknowledged it was hard to predict what effect they would have.
However, Waller said on Friday that policymakers “should be basing policy based on the data” that has already showed a cooling of price pressures, given that the tariff effect would only be temporary.
“I think we’ve got room to bring it down, and then we can kind of see what happens with inflation."
The FOMC's dot plot graph this weekend still showed that policymakers expect to cut rates twice again in 2025, though the market consensus is pointing to the first cut coming in September.