A July interest rate cut is gaining momentum after Federal Reserve Governor Christopher Waller, a Trump appointee, publicly backed the move, citing cooler-than-expected inflation and limited economic risks.
Waller, speaking in New York on July 17, pointed to the June Consumer Price Index of 2.7% as a clear sign inflation is under control. “With inflation near target and the upside risks limited, we should not wait until the labor market deteriorates before we cut the policy rate,” he said. He called for the Federal Funds Rate to drop by as much as 150 basis points, from its current 4.25% to 4.5% range, down to 3%.
His position aligns with President Trump’s call for an aggressive 3-point rate cut to stimulate economic growth ahead of the August 1 tariff deadline. Trump has argued that the Fed’s current rate is “choking growth,” especially as his administration moves forward with the largest tariffs in nearly a century, imposing duties ranging from 10% to 50% on imports.
The Federal Open Market Committee (FOMC), the 12-member panel led by Fed Chair Jerome Powell, will meet July 29–30 to decide. While some on the panel remain cautious, Waller’s endorsement signals growing internal support for easing.
A deep rate cut could reduce borrowing costs for consumers—lowering mortgage rates, credit card interest, and student loan payments—while also giving the economy a jolt as Trump prepares to roll out his new tax plan.
Still, political tensions are running high. Trump has openly attacked Powell, pressuring the Fed to act. Whether Waller’s comments mark a broader shift in Fed sentiment remains to be seen, but the odds of a July cut just got stronger.