US Fed official backs further rate cut due to weak job market

A key Federal Reserve official said Monday that he supports a third consecutive interest rate cut by the US central bank in December, as the jobs market remains weak and is almost stalling.

"My focus is on the labor market, and after months of weakening, it is unlikely that the September jobs report later this week or any other data that's going to come out in the next few weeks is going to change my view that another cut is in order," said Fed Governor Christopher Waller in remarks at a London dinner.

He added that a December cut will "provide additional insurance" against an acceleration in labor market weakening, adding that he backs another 25 basis points reduction.

After holding interest rates steady for most of the year, the Fed started lowering the benchmark lending rate in September and again in October.

But Fed Chair Jerome Powell said last month that another cut at its December policy meeting was not a "foregone conclusion."

For now, Waller argued that lowering rates further is a matter of "risk management," adding that the labor market is "still weak and near stall speed."

He added that President Donald Trump's tariffs this year appear to be having a "one-off effect" and are not likely to be a persistent source of inflation.

Waller stressed in his remarks as well that even as a booming stock market supports spending by "a narrow band of well-off consumers, it does not reflect financial conditions for most Americans, and that is a vulnerability for the economy."

He expects that even after excluding the temporary effects of a lengthy US government shutdown, real gross domestic product growth likely slowed in the second half of 2025.