Chris Waller

Federal Reserve Governor Chris Waller is advocating for the central bank to signal that its next policy move might not be an interest rate cut, citing elevated inflation pressures. He proposes removing the "easing bias" language from policy statements, emphasizing a pause on rate changes for the near term while monitoring global developments.

Jerome Powell highlights the importance of the Federal Reserve's independence. This comes as Donald Trump pushes for interest rate cuts. Powell says the Fed is focused on economic stability for everyone. The Fed is holding rates steady due to trade policy uncertainty. Inflation may rise this summer. A rate cut in July is not off the table.

Federal Reserve officials expressed concerns over upside inflation risks outweighing employment worries, amidst disagreements on Trump's tariffs' economic impact. Minutes revealed divisions within the Federal Open Market Committee, with some members dissenting due to concerns about economic weakening and potential labor market damage. The labor market's performance will likely determine the Fed's decision on interest rate cuts in September.

Wall Street saw slight gains Friday, with the S&P 500 and Nasdaq near record highs, potentially marking a third winning week. Investor optimism was driven by strong earnings, falling Treasury yields, and speculation about a Federal Reserve rate cut. Merger talks and acquisitions also influenced market movements, while mixed global market performance added complexity.

A major auto strike, the resumption of student-loan repayments, and a shutdown that may yet come back after the stop-gap spending deal lapses, could easily shave a percentage point off GDP growth in the fourth quarter. Add those shocks to other powerful forces at work on the economy — from dwindling pandemic savings to soaring interest rates and now oil prices too — and the combined impact could be enough to tip the US into a downturn as early as this year.