Federal Reserve Governor Christopher Waller reiterated his support for an interest rate cut in September and opened the door to a potentially larger move if the labor market continues to weaken.
In a speech Thursday evening, the policymaker said he expects the August nonfarm payrolls report to be weak, with Bureau of Labor Statistics revisions indicating that the the economy may have lost jobs over the past several months.
“Based on what I know today, I would support a 25 basis point cut at the Committee’s meeting on September 16 and 17,” Waller said during the speech in Miami. “While there are signs of a weakening labor market, I worry that conditions could deteriorate further and quite rapidly, and I think it is important that the [Federal Open market Committee] not wait until such a deterioration is under way and risk falling behind the curve in setting appropriate monetary policy.”
A basis point is 0.01%, so a reduction of 25 basis points would be equal to a quarter percentage point.
Waller said he believes the Fed can use its power over interest rates to stave off further labor market weakening. “So, let’s get on with it,” he said.
