Federal Reserve Governor Bullard: There is room to further lower interest rates, but there is no need to act hastily.

Federal Reserve Board member Waller said that as inflation continues to slow, the Fed has room to further lower interest rates to return monetary policy to a "neutral" position, but there is no need to rush to take action at the moment. Waller outlined a scenario in which inflation would continue to cool until 2026 in an interview on Wednesday and pointed out that the current monetary policy stance is still clearly on the tight side. He estimated that the federal funds rate is still up to about 100 basis points above the neutral rate. "Because inflation is still relatively high, we can take it slow, there is no need to hurry to lower it," Waller said. "We can steadily and gradually lower the policy rate to near neutral levels." This is Waller's first public statement after the Fed cut interest rates for the third consecutive time last week. The rate decision saw three officials voting against for the first time since 2019, with opposition coming from different camps on policy stance, highlighting deepening divisions within the Federal Open Market Committee (FOMC). At the same time, there were slight adjustments in the wording of the policy statement, implying increased uncertainty among officials about the timing of the next rate cut. It is worth noting that Waller is currently considered one of the potential candidates for the next Fed chair and is expected to meet with US President Trump later on Wednesday. When asked about this, Waller joked that he "heard the same thing." When discussing political factors, Waller emphasized that he would firmly defend the Fed's independence and resist any political pressure from the White House. "Without a doubt, I am willing to do so. I have spent 20 years studying and defending central bank independence and its importance, and I have left a lot of research and records in this regard."