Federal Reserve Governor Wall said that if the labor market is under pressure, he will support interest rate cuts to deal with the impact of tariffs.

Federal Reserve Board Member Christopher Waller said in an interview on Thursday that if the Trump administration re-imposes high tariffs, businesses may begin to lay off more employees, and in that case, he would support rate cuts to protect the labor market. "If very high tariffs are re-imposed, you may see more layoffs and the unemployment rate may also rise, which would not surprise me," Waller said in the interview. "If I see a significant deterioration in the labor market, as part of the Fed's dual mandate of employment, I believe we have a responsibility to act." Waller pointed out that he does not believe the impact of tariffs will have a significant impact on the overall economy before July, but if high tariffs persist in the long term, the unemployment rate could rise rapidly afterwards. However, Waller reiterated that he believes the inflation pressure caused by Trump's tariff policy will be temporary, a view that contrasts with some other Fed officials. The latter are concerned that tariffs imposed on several U.S. trading partners could lead to more persistent inflation. Against the backdrop of high economic policy uncertainty, Fed Chairman Powell and other officials have repeatedly emphasized the importance of maintaining stable inflation and public confidence in price expectations when dealing with uncertainties caused by tariffs and Trump's other economic policies. As of now, the Fed has not adjusted interest rates in 2025, and Powell has also repeatedly stated that there is no rush to make policy changes. Waller's remarks highlight that rate cuts may become a policy option if unemployment data worsens. The market is closely watching for hints in Trump's campaign rhetoric on the direction of trade policy, while also evaluating the potential impact it may have on the future path of monetary policy.