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Investing.com -- Federal Reserve Governor Christopher Waller stated Friday that the central bank should cut interest rates again in December, citing weakness in the labor market despite the lack of official economic data during the ongoing government shutdown.
"We know inflation is going to come back down, so this is why I’m still advocating that we cut policy rates in December," Waller said during an interview with Larry Kudlow on Fox Business Network. "That’s what all the data is telling me to do."
Waller emphasized that the Fed has access to sufficient economic information despite the government shutdown. He noted that inflation expectations remain anchored and that excluding temporary effects, PCE inflation is currently running at about 2.5%.
The Fed governor suggested that policymakers should "look through" any inflation driven by tariffs, which he characterized as having only a minor effect on overall inflation. His primary concern has shifted from inflation to labor market conditions.
"Inflation is coming back to 2%, biggest concern now is labor market," Waller stated.
He dismissed the idea that limited data availability during the shutdown should halt the Fed’s policy actions, asserting that "data fog does not tell you to stop" and that "the right thing to do with policy is keep cutting."
When asked about his future at the central bank, Waller indicated he would accept a nomination to become Fed Chair if offered the position by the president.