A prominent Federal Reserve official on Tuesday laid out a case for lowering interest rates methodically at some point this year as the economy comes into balance and inflation cools — although he acknowledged that the timing of those cuts remained uncertain.
Christopher Waller, one of the Fed’s seven Washington-based officials and one of the 12 policymakers who gets to vote at its meetings, said during a speech at the Brookings Institution on Tuesday that he saw a case for cutting interest rates in 2024.
“The data we have received the last few months is allowing the committee to consider cutting the policy rate in 2024,” Mr. Waller said.
While noting that risks of higher inflation remain, he said “I am feeling more confident that the economy can continue along its current trajectory.”Mr. Waller suggested that the Fed should lower interest rates as inflation falls.
Because interest rates do not incorporate price changes, otherwise so-called real rates that are adjusted for inflation would otherwise be climbing as inflation came down, thus weighing on the economy more and more heavily.
Persons:
Christopher Waller, ” Mr, Waller, “, Mr
Organizations:
Federal Reserve, Brookings Institution
Locations:
Washington