Federal Reserve Governor Waller sends a clear dovish signal: in favor of cutting interest rates in July.

Federal Reserve Governor Waller recently stated that he supports the idea of considering a rate cut in July, believing that tariffs will not lead to sustained inflation. He said that tariffs will be a one-time factor, and the Fed should not wait until the labor market collapses to cut rates. Waller said that currently, the job market is stable but there are signs emerging, such as high unemployment rates among recent graduates. The Fed has been waiting for inflationary impacts to appear for the past six months. Waller believes that the Fed has room to lower interest rates and see what happens with inflation. Waller stated that the Fed could have the conditions for a rate cut as early as July. Prior to Waller's comments, the market was betting that there was only a 14% chance of a rate cut by the Fed in July.