Federal Reserve Governor Wall: Do not support an interest rate cut at the March policy meeting; need to observe more data.

Christopher Wall, a member of the Federal Reserve Board of Governors, stated that he does not support pushing for a rate cut at the March policy meeting of the Fed, and would like to see more economic data before making a decision, especially in light of the recent changes in trade policy by the Trump administration. Wall noted that although in the past he believed policymakers should ignore the one-time price increases caused by tariffs, the new tariff policy of the Trump administration may have a greater impact than expected. On Tuesday, President Trump announced that tariffs on Chinese goods would be raised to 20%, and tariffs of 25% would be imposed on goods from Canada and Mexico. However, he decided to delay the implementation of tariffs on North America for one month on Thursday, giving Canada and Mexico some breathing room. This change has increased uncertainty in the economic outlook, making it more challenging for the Fed to assess inflation trends. Wall pointed out that due to the impact of tariffs, the Fed needs to address the "signal-extraction problem," which is distinguishing between the fundamental trends and short-term "tariff noise" in inflation data. He explained, "You get a data point, but figuring out what part of it is real economic signal, what part is temporary tariff influences, is quite difficult." He also emphasized that the uncertainty of tariff policy has already affected private businesses and households' investment and consumption decisions. This impact has been reflected in market sentiment data and may manifest in hard data such as retail sales and capital expenditures in the future. He distinguished between two different ways of cutting rates: a "good news rate cut" due to declining inflation, and a "bad news rate cut" in the case of economic weakness or deterioration in the job market. Wall currently believes that the Fed is implementing a "good news rate cut," but recent economic data, especially softer indicators such as market confidence and expectations, suggest that the economy may not be as strong as previously expected. "We're seeing a lot of signs in soft data that suggest economic growth, labor markets, production, and consumption might not be as robust as expected," Wall said, "but these have not yet been reflected in hard data, and the Fed's decisions must rely on data rather than market rumors." Therefore, Fed policymakers are still in a "wait-and-see mode," waiting for more definitive economic data, such as whether employment and GDP show substantial deterioration. Wall explicitly stated that he does not support a rate cut at the Federal Open Market Committee (FOMC) meeting on March 18-19. "I want to see the inflation data for February and more information on changes in tariff policy," Wall said, adding that if future data begins to show a significant weakening in the economy, a "bad news rate cut" may occur. However, if the job market and overall economy remain strong, the Fed will continue to monitor inflation and may consider gradually cutting rates in the future if inflation trends meet targets, but will not take immediate action at the next meeting.